SBA’s Office of Inspector General: Overview,
Impact, and Relationship with Congress
Updated October 23, 2020
Congressional Research Service
https://crsreports.congress.gov
R44589

SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress

Summary
Congress created offices of inspector general (OIGs) to assist in its oversight of the executive
branch. OIGs provide independent, nonpartisan analysis, conducted in accordance with generally
accepted government auditing standards, to identify and recommend ways to limit waste, fraud,
and abuse in federal programs and enhance program and operational efficiency and effectiveness.
OIGs’ activities supplement and complement those of the Government Accountability Office
(GAO), which serves a similar, though not identical, role in assisting congressional oversight of
the executive branch. Together, OIGs and GAO provide Congress with information and analysis
needed to conduct effective oversight and, in the process, help Congress maintain its balance of
power with the presidency.
OIGs exist in more than 70 federal agencies, including all departments and larger agencies,
numerous boards and commissions, and other entities. The U.S. Small Business Administration’s
Office of Inspector General (SBA OIG) was created under authority of the Inspector General Act
of 1978 (P.L. 95-452, as amended). Its three primary statutory purposes are to
1. conduct and supervise audits and investigations of the SBA’s programs and
operations;
2. recommend policies designed to promote the economy, efficiency, and
effectiveness of the SBA’s programs and operations and to prevent and detect
fraud and abuse; and
3. keep both the SBA Administrator and Congress “fully and currently informed
about problems and deficiencies relating to the administration of such programs
and operations and the necessity for and progress of corrective action.”
During FY2019, the SBA OIG issued 23 audit reports containing 94 recommendations for
improving the SBA’s programs and operations, and its investigations resulted in 49 indictments
or informations and 36 convictions. The SBA OIG claimed that its recommendations resulted in
monetary savings and recoveries of $111 million in FY2019. In addition, the SBA OIG’s annual
Report on the Most Serious Management and Performance Challenges Facing the SBA focuses
attention “on areas that are particularly vulnerable to fraud, waste, error, and mismanagement, or
otherwise pose a significant risk and generally have been subject to one or more OIG or GAO
reports.”
This report examines the SBA OIG’s statutory authorities; reporting requirements; funding ($23.5
million in FY2021 under the continuing resolution); staffing and organizational structure; and
recent activities (audits, investigations, etc.), including an examination of the SBA’s
implementation of the Paycheck Protection Program (PPP). PPP was created to assist small
businesses adversely affected by the Coronavirus Disease 2019 (COVID-19) pandemic.
This report also examines the SBA OIG’s impact on monetary savings, SBA programs and
operations, and legislation affecting the agency. The report concludes with observations
concerning the SBA OIG’s relationship with Congress.
Some areas of possible congressional interest, other than SBA OIG funding and staffing issues,
include exploring ways to more accurately quantify the SBA OIG’s claims of monetary savings
and to determine if the SBA OIG should undertake additional tracking and monitoring activities
to more accurately quantify the office’s impact on SBA programs, operations, and legislation.
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SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress

Introduction
Congress created offices of inspector general (OIGs) in 1978 (via P.L. 95-452, the Inspector
General Act of 1978, or the IG Act) to assist in its oversight of the executive branch. At that time,
Congress determined that there were serious deficiencies in the executive branch’s auditing and
investigative activities designed to curb waste, fraud, and abuse and promote agency operational
and program efficiency.1 For example, the House and Senate reports accompanying the bill that
became the IG Act argued that
 auditing and investigative activities were scattered throughout the various federal
departments and were often conducted in response to a complaint as opposed to
having in place “affirmative programs to look for possible fraud or abuse”;
 investigators in some agencies (including the Small Business Administration,
SBA) were not allowed to initiate investigations without clearance from officials
responsible for the programs involved;
 many agency representatives engaged in auditing and investigative activities
(including those within the SBA) reported that their office lacked sufficient
budgets to do its job, many of the auditing and investigative offices (including
those at the SBA) often reported to those who were responsible for the program
being audited or investigated; and
 some auditors and investigators were unable to devote full time to their audit or
investigative responsibilities.2
The House report concluded that independent OIGs “are urgently needed.”3 The Senate report
concluded that “with rare exceptions, the agencies have not adequately policed their own
operations and programs.”4

1 Definitions of program efficiency vary. For example, the German sociologist Max Weber argued that organizations
operate most efficiently when they are organized in a hierarchical fashion with established rules for making decisions
and dividing the labor of the organization accordingly. The Government Accountability Office (GAO) incorporates in
its definition of government efficiency how an agency spends money: a ratio of inputs (the cost of operating the
government agency or program) to outcomes (the desired results of the program, such as events, occurrences, or
changes in conditions, behaviors, or attitudes). See GAO, Streamlining Government: Opportunities Exist to Strengthen
OMB’s Approach to Improving Efficiency, GAO-10-394, May 7, 2010, p. 3, at http://www.gao.gov/assets/310/
304231.pdf. A congressional staff member (now-retired) suggested a hybrid of these definitions: “a government agency
is efficient if it is properly structured to produce accountable decisions and desired results ...[that] use the least amount
of federal tax dollars to achieve desired outcomes, i.e. are cost-effective in ensuring that performance objectives are
achieved.” See Barry Pineles, chief counsel, House Committee on Small Business, “Hearing Memorandum: Reducing
Duplication and Promoting Efficiency at the SBA: The Inspector General’s View,” June 3, 2013.
2 U.S. Congress, House Committee on Government Operations, Establishment of Offices of Inspector General in
Certain Executive Departments and Agencies, 95th Cong., 1st sess., August 5, 1977, H.Rept. 95-584 (Washington: GPO,
1977), pp. 5-7; and U.S. Congress, Senate Committee on Governmental Affairs, Establishment of Offices of Inspector
and Auditor General in Certain Executive Departments and Agencies, 95th Cong., 2nd sess., August 8, 1978, S.Rept. 95-
1071 (Washington: GPO, 1978), pp. 4-6.
3 U.S. Congress, House Committee on Government Operations, Establishment of Offices of Inspector General in
Certain Executive Departments and Agencies, 95th Cong., 1st sess., August 5, 1977, H.Rept. 95-584 (Washington: GPO,
1977), p. 11.
4 U.S. Congress, Senate Committee on Governmental Affairs, Establishment of Offices of Inspector and Auditor
General in Certain Executive Departments and Agencies, 95th Cong., 2nd sess., August 8, 1978, S.Rept. 95-1071
(Washington: GPO, 1978), p. 9.
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SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress

OIGs were designed to provide Congress and federal agency heads independent, nonpartisan
analysis, conducted in accordance with generally accepted government auditing standards, to
identify and recommend ways to limit waste, fraud, and abuse in federal programs and enhance
operational and program efficiency and effectiveness.
OIGs’ activities were to supplement and complement those of the Government Accountability
Office (GAO), which serves a similar, though not identical, role in assisting Congress fulfill its
oversight function.5 Together, OIGs and GAO (along with the Congressional Research Service
[CRS] and the Congressional Budget Office [CBO]) provide Congress with information and
analysis needed to conduct effective oversight and, in the process, help Congress maintain its
balance of power with the presidency.
OIGs currently exist in more than 70 federal agencies, including all departments and larger
agencies, numerous boards and commissions, and other entities.6 They are predominantly located
in executive branch agencies, but several legislative branch entities—for example, the Library of
Congress (LOC), GAO, and the Government Publishing Office (GPO)—also have OIGs.
The overwhelming majority of OIGs, including the U.S. Small Business Administration OIG
(SBA OIG), are governed by the IG Act. It structures inspector general (IG) appointments and
removals, powers and authorities, and duties and responsibilities. Other laws have established or
amended IG powers and authorities in specified agencies or programs. As a result, IG statutory
powers and authorities are not identical across the federal government and, in certain cases, these
differences are significant. Nonetheless, in general, statutory OIGs follow the IG Act’s standards,
guidelines, and directives.
For example, the IG Act provides IGs five statutory duties and responsibilities as follows:
1. Conduct, supervise, and coordinate audits and investigations of their agency’s
programs and operations.7

5 Offices of Inspector General (OIGs) are independent entities focusing on the programs and activities of their federal
agency. GAO is a congressional agency whose work spans across all federal agencies and “is done at the request of
congressional committees or subcommittees ... is mandated by public laws or committee reports ... [or is undertaken]
under the authority of the Comptroller General.” GAO’s focus is on supporting “congressional oversight by auditing
agency operations to determine whether federal funds are being spent efficiently and effectively; investigating
allegations of illegal and improper activities; reporting on how well government programs and policies are meeting
their objectives; performing policy analyses and outlining options for congressional consideration; and issuing legal
decisions and opinions, such as bid protest rulings and reports on agency rules.” GAO advises “Congress and the heads
of executive agencies about ways to make government more efficient, effective, ethical, equitable and responsive.” See
GAO, “About GAO,” at http://www.gao.gov/about/index.html.
6 For additional information and analysis concerning OIGs see CRS Report R43814, Federal Inspectors General:
History, Characteristics, and Recent Congressional Actions, by Kathryn A. Francis and Michael Greene.
7 OIG audits are conducted in accordance with federal audit standards established by the Comptroller General, and
other reviews generally are conducted in accordance with standards established by the Council of the Inspectors
General for Integrity and Efficiency (CIGIE). In addition, OIGs coordinate their activities with GAO to avoid
duplicating federal audits. See U.S. Congress, House Committee on Small Business, SBA Management and
Performance Challenges: The Inspector General’s Perspective, 114th Cong., 2nd sess., March 16, 2016, H. Hrg. 114-
049 (Washington: GPO, 2016), p. 22.
GAO-issued Generally Accepted Government Auditing Standards (GAGAS) require that audit organizations
performing audits and attestation engagements in accordance with GAGAS must have an external peer review
performed by reviewers independent of the audit organization being reviewed (another OIG or GAO) at least once
every three years.
In September 2014, the U.S. Department of Interior’s OIG reviewed the Small Business Administration OIG’s (SBA
OIG’s) Investigations Division. “The final report, dated November 13, 2014, found the system of internal safeguards
and management procedure for the investigative function of SBA OIG complied with CIGIE’s quality standards and
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2. Review existing and proposed legislation and regulations relating to their agency
and make recommendations in mandated semiannual reports concerning the
impact of such legislation or regulations on their agency’s programs and
operations or on the prevention and detection of fraud and abuse in those
programs and operations.
3. Recommend policies to improve their agency’s administration of its programs
and operations and prevent and detect fraud and abuse in those programs and
operations.
4. Recommend policies to facilitate relationships between their agency and other
federal, state, and local government agencies and nongovernmental entities to
promote the economy and efficiency of their agency’s administration of its
programs and operations and prevent and detect fraud and abuse in those
programs and operations.
5. Keep both their agency head and Congress fully and currently informed
concerning fraud and other serious problems, abuses, and deficiencies relating to
their agency’s administration of its programs and operations and to report on the
progress made in implementing recommended corrective action.8
This report examines the SBA OIG’s statutory authorities; reporting requirements; funding;
staffing and organizational structure; and recent activities (audits, investigations, etc.), including
an examination of the SBA’s implementation of the Paycheck Protection Program (PPP). The
PPP was created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L.
116-136) to provide low-interest loans to assist small businesses adversely affected by the novel
Coronavirus Disease 2019 (COVID-19) pandemic.9 These loans feature a six-month deferment of
payments and loan forgiveness if the borrower uses the loan proceeds for specified purposes (e.g.,
payroll, mortgage interest, rent, and utilities) and meets specified hiring and wage retention
requirements.
The SBA OIG’s impact on monetary savings, SBA programs and operations, and legislation
affecting the agency is also examined. The report concludes with some observations concerning
the SBA OIG’s relationship with Congress.
Some areas of possible congressional interest, other than SBA OIG funding and staffing issues,
include exploring ways to more accurately quantify the SBA OIG’s claims of monetary savings

the applicable Attorney General Guidelines. (OIGs can be assessed as either ‘compliant’ or ‘noncompliant’.)” See U.S.
Small Business Administration (SBA), OIG, “Semiannual Report to Congress, Spring 2016,” p. 61, at
https://www.sba.gov/sites/default/files/oig/SBA_OIG_SAR_Spring_2016.pdf.
On December 10, 2015, the SBA OIG’s audit division received a peer review rating of pass (audit organizations can
receive a rating of pass, pass with deficiencies, or fail) from the Smithsonian Institution’s Office of Inspector General.
A sample of the SBA OIG’s audits were reviewed to determine if the SBA OIG’s “system of quality control” in effect
for the period of April 1, 2012, through March 31, 2015, met governmental auditing standards (“A system of quality
control encompasses SBA OIG’s organizational structure and the policies adopted and procedures established to
provide it with reasonable assurance of conforming to Government Auditing Standards.”) See Smithsonian Institution,
Office of Inspector General, “System Review Report,” at https://www.sba.gov/sites/default/files/oig/
SBA_OIG_Peer_Review_System_Report_FINAL_signed_508.pdf.
8 IG Act of 1978, Section 4(1)-(5); and 5 U.S.C. Appendix §4(1)-(5).
9 For additional information and analysis of the small business provisions in the Coronavirus Aid, Relief, and
Economic Security Act (Cares Act, P.L. 116-136), see CRS Report R46284, COVID-19 Relief Assistance to Small
Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry.
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SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress

and to determine if the SBA OIG should undertake additional tracking and monitoring activities
to more accurately quantify the office’s impact on SBA programs, operations, and legislation.
SBA’s OIG
The SBA OIG is a separate, independent office that provides “independent, objective oversight to
improve the integrity, accountability, and performance of the SBA.”10 The SBA IG (Hannibal
“Mike” Ware) directs the office and is “appointed by the President, by and with the advice and
consent of the Senate, without regard to political affiliation and solely on the basis of integrity
and demonstrated ability in accounting, auditing, financial analysis, law, management analysis,
public administration, or investigations.”11
The SBA is a Cabinet-level agency. Although the SBA is one of the smaller Cabinet-level
agencies (with an annual budget of nearly $1 billion in FY2021 under the continuing
resolution),12 it administers a relatively wide range of programs to support small businesses,
including loan guaranty and venture capital programs to enhance small business access to capital;
contracting programs to increase small business opportunities in federal contracting; direct loan
programs for businesses, homeowners, and renters to assist their recovery from natural disasters;
and small business management and technical assistance training programs to assist business
formation and expansion.13 The SBA OIG is responsible for examining these programs and the
various SBA offices that administer them.
IGs report to the head of their agency or establishment, but are provided various powers and
protections that support their independence. For example, the SBA IG reports to the SBA
Administrator, but
 may be removed from office only by the President, or through the impeachment
process in Congress.14
 has the authority to hire staff.15
 determines priorities and projects (e.g., audits, reviews and investigations)
without outside direction.16

10 SBA, “Office of Inspector General,” at https://www.sba.gov/office-of-inspector-general.
11 P.L. 95-452, the Inspector General Act of 1978 (IG Act of 1978), Section 3(a); and 5 U.S.C. Appendix §3(a). Peggy
Elizabeth Gustafson was sworn in as the SBA IG on October 2, 2009, and became the Department of Commerce’s IG
on January 9, 2017. Mike Ware, who had been the SBA Deputy Inspector General since April 2016, became SBA’s
acting IG on January 9, 2017, was nominated by President Trump to be SBA IG on October 16, 2017, was confirmed
by the Senate on April 26, 2018, and sworn in as SBA IG on May 24, 2018. He had served various roles within the
Department of Interior’s OIG for 26 years prior to joining the SBA OIG.
12 P.L. 116-159, the Continuing Appropriations Act, 2021 and Other Extensions Act, provides funding through
December 11, 2020.
13 For additional information concerning these SBA programs, see CRS Report RL33243, Small Business
Administration: A Primer on Programs and Funding, by Robert Jay Dilger and Sean Lowry.
14 In addition, the President may transfer an inspector general (IG) to another position or location within the IG’s
agency. If an IG is removed from office or transferred to another position or location “the President shall communicate
in writing the reasons for any such removal or transfer to both Houses of Congress, not later than 30 days before the
removal or transfer.” See, IG Act of 1978, Section 3(b); and 5 U.S.C. Appendix §3(b).
15 IG Act of 1978, Section 6(a)(7); and 5 U.S.C. Appendix §6(a)(7).
16 IG Act of 1978, Section 6(a)(2); and 5 U.S.C. Appendix §6(a)(2). The SBA Administrator, President, Members of
Congress, SBA employees, and members of the public may request that a project take place, but, unless otherwise
required by law, the SBA IG is not obligated to do so.
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 cannot be prevented or prohibited “from initiating, carrying out, or completing
any audit or investigation, or from issuing any subpoena during the course of any
audit or investigation.”17
 must be provided “access to all records, reports, audits, reviews, documents,
papers, recommendations, or other material available ... which relate to programs
and operations with respect to which [the SBA] Inspector General has
responsibilities under this Act.”18
 must be provided “appropriate and adequate office space” and “such equipment,
office supplies, and communications facilities and services as may be necessary
for the operation of” the SBA OIG, including any “necessary maintenance
services for such offices and the equipment and facilities located therein.”19
Statutory Authorities
The IG Act provides all IGs nine statutory authorities:
1. Access to all records, reports, audits, reviews, documents, papers,
recommendations, or other material available relating to the IG’s responsibilities
under the IG Act.20
2. Make such investigations and reports relating to their agency’s administration of
its programs and operations as are, in the judgment of the IG, necessary or
desirable.
3. Request such information or assistance as may be necessary for carrying out the
duties and responsibilities provided by the IG Act from any federal, state, or local
governmental agency or unit thereof.
4. Require by subpoena the production of all information, documents, reports,
answers, records, accounts, papers, and other data in any medium necessary in
the performance of the functions assigned by the IG Act; provided that
procedures other than subpoenas shall be used by the IG to obtain documents and
information from federal agencies.
5. Administer to or take from any person an oath, affirmation, or affidavit,
whenever necessary in the performance of the functions assigned by the IG Act.
6. Have direct and prompt access to their agency head when necessary for any
purpose pertaining to the performance of functions and responsibilities under the
IG Act.
7. Select, appoint, and employ such officers and employees as may be necessary for
carrying out the functions, powers, and duties of the Office subject to the
provisions of title 5, United States Code, governing appointments in the

17 IG Act of 1978, Section 3(a); and 5 U.S.C. Appendix §3(a).
18 IG Act of 1978, Section 6(a)(1); and 5 U.S.C. Appendix §6(a)(1).
19 IG Act of 1978, Section 6(c); and 5 U.S.C. Appendix §6(c).
20 Access to records, reports, etc. may be limited under specified circumstances (e.g., if such access limits “the exercise
of law enforcement powers established under any other statutory authority, including United States Marshals Service
special deputation”). See IG Act of 1978, Section 6(e)(8); and 5 U.S.C. Appendix §6(e)(8). There have also been
instances where the executive branch has redacted information citing authority provided in other statutes. This practice
is often challenged by OIGs and Congress as circumventing the IG Act’s intent for access to all records, reports, etc.
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competitive service, and the provisions of chapter 51 and subchapter III of
chapter 53 of such title relating to classification and General Schedule pay rates.
8. Obtain services as authorized by Section 3109 of title 5, United States Code, at
daily rates not to exceed the equivalent rate prescribed for grade GS-18 of the
General Schedule by Section 5332 of title 5, United States Code.
9. To the extent and in such amounts as may be provided in advance by
appropriations acts, to enter into contracts and other arrangements for audits,
studies, analyses, and other services with public agencies and with private
persons, and to make such payments as may be necessary to carry out the
provisions of the IG Act.21
In addition, the IG Act provides 25 OIGs, including the SBA OIG, direct law enforcement
authority.22 It also authorizes the U.S. Attorney General to delegate law enforcement authority to
other OIGs under specified circumstances.23
Reporting Requirements
The IG Act requires IGs to prepare and transmit semiannual reports (two per year) to their
agency’s head, not later than April 30 and October 31 of each year, summarizing the OIG’s
activities during the immediately preceding six-month periods ending on March 31 and
September 30. Agency heads are to transmit these reports to the appropriate committees or
subcommittees of Congress in unaltered form within 30 days after receipt. Agency heads may
provide any additional comments deemed appropriate. Agency heads must also provide specified
information, such as statistical tables showing the total number of audit reports, inspection
reports, and evaluation reports for which final action had not been taken by the commencement of
the reporting period; on which management decisions were made during the reporting period; and
for which no final action had been taken by the end of the reporting period.24 Copies of the
semiannual reports must be made available to the public upon request and at a reasonable cost
within 60 days of their transmission to Congress.25
The OIG’s semiannual reports are required to include, but not limited to, 16 informational items.
For example, the SBA OIG’s report must include, among other items, the following:
 A description of significant problems, abuses, and deficiencies relating to the
SBA’s administration of programs and operations identified during the reporting
period.

21 IG Act of 1978, Section 6(a); and 5 U.S.C. Appendix §6(a).
22 IG Act of 1978, Section 6(e)(3); and 5 U.S.C. Appendix §6(e)(3). Five other OIGs have been provided law
enforcement authority by other federal statutes.
23 See IG Act of 1978, Section 6(e)(1)-(2); and 5 U.S.C. Appendix §6(e)(1)-(2). Law enforcement authority is generally
defined as providing certain OIG employees the legal authority to carry a firearm while engaged in official duties,
make an arrest without a warrant while engaged in official duties, and seek and execute warrants for arrest, search of
premises, or seizure of evidence. See IG Act of 1978, Section 6(e)(1); and 5 U.S.C. Appendix §6(e)(1). The specified
circumstances are “(A) the affected OIG is significantly hampered in the performance of responsibilities established by
this Act as a result of the lack of such powers; (B) available assistance from other law enforcement agencies is
insufficient to meet the need for such powers; and (C) adequate internal safeguards and management procedures exist
to ensure proper exercise of such powers.” See IG Act of 1978, Section 6(e)(2); and 5 U.S.C. Appendix §6(e)(2).
24 IG Act of 1978, Section 5(b); and 5 U.S.C. Appendix §5(b).
25 The SBA OIG’s semiannual reports can be accessed online at https://www.sba.gov/oig/category/oig-navigation-
structure/reading-room/semi-annual-reports-congress.
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 A description of the SBA OIG’s recommendations for corrective action.
 An identification of each significant recommendation described in previous
semiannual reports on which corrective action has not been completed.
 A summary of matters referred to prosecutive authorities and the prosecutions
and convictions that have resulted.
 A summary of each report made to the SBA Administrator relating to instances
when information or assistance requested has, in the IG’s judgment, been
unreasonably refused or not provided during the reporting period.
 A listing of each audit report, inspection report, and evaluation report issued
during the reporting period and for each report, where applicable, the total dollar
value of questioned costs (including a separate category for the dollar value of
unsupported costs) and the dollar value of recommendations that funds be put to
better use.
 A summary of each audit report, inspection report, and evaluation report issued
before the commencement of the reporting period for which no management
decision has been made by the end of the reporting period (including the date and
title of each such report), an explanation of the reasons such management
decision has not been made, and a statement concerning the desired timetable for
achieving a management decision on each such report.
 Information concerning any significant management decision with which the
SBA IG is in disagreement.26
IGs are also required to report suspected violations of federal criminal law directly and
expeditiously to the U.S. Attorney General, and any “particularly serious or flagrant problems,
abuses, or deficiencies” relating to their agency’s operations and administration of programs
immediately to the agency’s head.27
In addition, pursuant to P.L. 106-531, the Records Consolidation Act of 2000,28 and the Office of
Management and Budget (OMB) Circular A-136,29 the SBA OIG issues an annual Report on the
Most Serious Management and Performance Challenges Facing the SBA. This report is, arguably,
the SBA OIG’s signature oversight document, focusing attention “on areas that are particularly
vulnerable to fraud, waste, error, and mismanagement, or otherwise pose a significant risk and
generally have been subject to one or more OIG or GAO reports.”30

26 IG Act of 1978, Section 5(a); and 5 U.S.C. Appendix §5(a).
27 IG Act of 1978, Section 4(d) and 5(d); and 5 U.S.C. Appendix §4(d) and §5(d).
28 P.L. 106-531 authorizes federal agency heads to consolidate any statutorily required reports (including financial and
performance management reports) into an annual report and submit the consolidated report not later than 150 days after
the end of the agency’s fiscal year. Not all OIGs are required to author this report.
29 OMB Circular A-136, Financial Reporting Requirements-Revised (8/4/2015), at https://www.whitehouse.gov/sites/
whitehouse.gov/files/omb/circulars/A136/a136_revised_2015.pdf.
30 SBA, OIG, “FY2018 Congressional Budget Justification,” p. 20, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/Office_of_Inspector_General_-_FY_2018_CBJ.pdf.
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Funding
The IG Act provides presidentially appointed IGs a separate appropriations account, known
colloquially as a “line item,” for their offices. This provision prevents federal administrators from
limiting, transferring, or otherwise reducing OIG funding once it has been specified in law.31
IGs are authorized to transmit a budget estimate and request to their respective agency head each
fiscal year. Each IG’s request must include amounts for operations, training, and for the support
of the Council of the Inspectors General on Integrity and Efficiency (CIGIE).32
The agency’s budget request to the President must include the OIG’s original budget request and
any comments the affected IG has regarding the proposal.33 The President must include in the
Administration’s budget submission to Congress the IG’s original request; the amount requested
by the President for the OIG’s operations, training, and support for CIGIE; and any comments the
affected IG has regarding the proposal if the IG concludes that the President’s budget would
substantially inhibit the IG from performing the duties of the office.34
Each year, the SBA OIG transmits a budget justification document to the SBA Administrator,
which is available online.35 That document includes the SBA OIG’s budget request, an overview
of the SBA OIG’s mission and authorities, a list of critical risks facing the SBA, an accounting of
the office’s oversight activities during the previous fiscal year, areas of emphasis for the coming
fiscal year, and a table of statistical highlights and accomplishments for the previous fiscal year
(such as the number of reports and recommendations issued, estimated amounts saved or
recouped, number of indictments and convictions).
Table 1 shows the SBA OIG’s appropriations over the FY2010-FY2021 period. The SBA OIG
received an initial appropriation of $23.5 million in FY2020 (including a $1.6 million transfer
from the SBA Disaster Loan Program account for investigative costs related to SBA disaster
loans), another $25 million in FY2020 for oversight of the CARES Act’s SBA lending provisions
(funding available through September 30, 2024), and $23.5 million in FY2021 under the
continuing resolution (funding through December 11, 2020).36

31 For additional information and analysis concerning OIG budgeting, see CRS Report R43814, Federal Inspectors
General: History, Characteristics, and Recent Congressional Actions, by Kathryn A. Francis and Michael Greene.
32 IG Act of 1978, Section 6(f)(1); and 5 U.S.C. Appendix §6(f)(1). The Council of the Inspectors General on Integrity
and Efficiency (CIGIE) is “an independent entity established within the executive branch to address integrity, economy
and effectiveness issues that transcend individual Government agencies and aid in the establishment of a professional,
well-trained and highly skilled workforce in the Offices of Inspectors General.” See CIGIE, “What is CIGIE?” at
https://www.ignet.gov/. CIGIE also oversees the conduct of high-ranking employees in the inspector general
community and investigates wrongdoing against those employees. For additional information and analysis concerning
CIGIE, see CRS Report R44198, Oversight of the Inspector General Community: The IG Council’s Integrity
Committee, by Kathryn A. Francis.
33 IG Act of 1978, Section 6(f)(2); and 5 U.S.C. Appendix §6(f)(2).
34 IG Act of 1978, Section 6(f)(3); and 5 U.S.C. Appendix §6(f)(3).
35 The SBA OIG’s budget justification documents for FY2010-FY2021 are available on the SBA’s website. See SBA,
“Congressional Budget Justification/Annual Performance Report,” at https://www.sba.gov/document/report--
congressional-budget-justification-annual-performance-report.
36 P.L. 116-93, the Consolidated Appropriations Act, 2020; P.L. 116-136, the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act); and P.L. 116-159, the Continuing Appropriations Act, 2021 and Other Extensions Act,
provides funding through December 11, 2020.
The SBA OIG has requested $23.6 million for FY2021: $22 million in new budget authority (including $300,000 for
training and $77,500 for CIGIE) and a $1.6 million transfer from the SBA Disaster Loan Program account for
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Table 1. SBA OIG’s Appropriations, FY2010-FY2021
($ in millions)
Transfer from
the Disaster Loan
New Budget
Program
Other
Fiscal Year
Authority
Account
Adjustments
Total
2021 CR
$21.900
$1.600
$0.000
$23.500
2020
$21.900
$1.600
$25.000a
$48.500
2019
$21.900
$1.000
$0.000
$22.900
2018
$19.900
$0.000
$7.000b
$26.900
2017
$19.900
$1.000
$0.000
$20.900
2016
$19.900
$1.000
$0.000
$20.900
2015
$19.400
$1.000
$0.000
$20.400
2014
$19.000
$1.000
$0.000
$20.000
2013
$16.267
$1.000
$5.000c
$21.166
($1.101)
2012
$16.267
$1.000
$0.000
$17.267
2011
$16.300
$1.000
($0.033)d
$17.267
2010
$16.300
$1.000
$0.000
$17.300
Sources: P.L. 112-10, the Department of Defense and Ful -Year Continuing Appropriations Act of 2011; P.L.
112-25, the Budget Control Act of 2011; P.L. 112-74, the Consolidated Appropriations Act, 2012; P.L. 112-175,
the Continuing Appropriations Resolution, 2013; P.L. 113-2, the Disaster Relief Appropriations Act, 2013; P.L.
113-6, the Consolidated and Further Continuing Appropriations Act, 2013; P.L. 113-76, the Consolidated
Appropriations Act, 2014; P.L. 113-235, the Consolidated and Further Continuing Appropriations Act, 2015; P.L.
114-113, the Consolidated Appropriations Act, 2016; P.L. 115-56, the Continuing Appropriations Act, 2018 and
Supplemental Appropriations for Disaster Relief Requirements Act, 2017; P.L. 115-123, the Bipartisan Budget
Act of 2018; P.L. 115-141, the Consolidated Appropriations Act, 2018; P.L. 116-6, the Consolidated
Appropriations Act, 2019; P.L. 116-93, the Consolidated Appropriations Act 2020; P.L. 116-136, the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act); and P.L. 116-159, the Continuing
Appropriations Act, 2021 and Other Extensions Act (funding through December 11, 2020).
Notes:
a. In FY2020, P.L. 116-136 provided the SBA OIG $25 mil ion for oversight of the CARES Act’s SBA lending
provisions. The funding is available through September 30, 2024.
b. In FY2018, P.L. 115-123 provided the SBA OIG $7.0 mil ion for investigative costs related to supplemental
funding for SBA disaster loans
c. In FY2013, P.L. 113-2 provided the SBA OIG $5.0 mil ion to remain available until expended for expenses
related to oversight of disaster loans fol owing Hurricane Sandy. In addition, P.L. 112-25 and P.L. 113-6
imposed a federal government-wide sequestration process and a required 0.2% across-the-board rescission,
resulting in a $1.101 mil ion reduction from the SBA OIG’s budget.
d. In FY2011, P.L. 112-10 imposed a 0.2% rescission on federal agencies, resulting in a reduction of $0.033
mil ion from the SBA OIG’s budget.

investigative costs related to SBA disaster loans. See SBA, OIG, “FY2021 Congressional Budget Justification,” pp.
228, 252, at https://www.sba.gov/document/report--congressional-budget-justification-annual-performance-report
(hereinafter SBA, OIG, “FY2021 Congressional Budget Justification”).
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Staffing and Organizational Structure
As shown in Table 2, the SBA OIG’s FTEs have remained relatively stable since FY2000,
ranging from a low of 93 FTEs in FY2014 to a high of 118 FTEs in FY2020. Approximately 85%
of the SBA OIG’s expenditures are attributed to payroll expenses.37
Table 2. SBA OIG’s Full-Time Equivalent Employees, FY2000-FY2020
Fiscal Year
Full-Time Equivalent Employees
Fiscal Year
Full-Time Equivalent Employees
2020
118
2009
104
2019
110
2008
106
2018
110
2007
103
2017
101
2006
95
2016
96
2005
95
2015
103
2004
98
2014
93
2003
100
2013
106
2002
108
2012
110
2001
108
2011
110
2000
112
2010
110

Sources: U.S. Small Business Administration, Office of Inspector General, “Correspondence with the author,”
June 23, 2016, and February 1, 2017; U.S. Small Business Administration, Office of Inspector General, “FY2018
Congressional Budget Justification,” p. 3, at https://www.sba.gov/sites/default/files/aboutsbaarticle/
Office_of_Inspector_General_-_FY_2018_CBJ.pdf; U.S. Small Business Administration, “FY2019 Congressional
Budget Justification and FY2017 Annual Performance Report,” p. 17, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/SBA_FY_2019_CBJ_APR_2_12_post.pdf; U.S. Smal Business Administration, “SBA Plan for
Operating in the Event of a Lapse in Appropriations,” effective December 2018, p. 22; and U.S. Smal Business
Administration, Office of Inspector General, “FY2021 Congressional Budget Justification and FY2019 Annual
Performance Report,” pp. 15, 228, at https://www.sba.gov/document/report—congressional-budget-justification-
annual-performance-report.
In 2013, then-SBA IG Peggy Gustafson testified that “resource constraints do sometime preclude
us from initiating or continuing a number of investigations” and if she were provided additional
resources, she would “target early defaulted loans, fraud, and lender negligence, and ... increase
the capacity of our existing investigative personnel.”38
The SBA OIG’s staff is organized into three divisions and several support offices.
 The Auditing Division performs and oversees audits and reviews of SBA
programs and operations, focusing on SBA business and disaster loans, business
development and government contracting programs, as well as mandatory and
other statutory audit requirements involving computer security, financial
reporting, and other work.

37 SBA, OIG, “FY2021 Congressional Budget Justification,” p. 228.
38 U.S. Congress, House Committee on Appropriations, Subcommittee on Financial Services and General Government,
Financial Services and General Government Appropriations for 2014, Part 6, 113th Cong., 1st sess., April 10, 2013, p.
195.
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 The Investigations Division manages a program to detect and deter illegal and
improper activities involving SBA’s programs, operations, and personnel. The
division has criminal investigations staff who carry out a full range of traditional
law enforcement functions and security operations staff who conduct name
checks and, where appropriate, fingerprint checks on program applicants to
prevent known criminals and wrongdoers from participating in SBA programs.
Security operations staff also conduct required employee background
investigations.
 The Management and Administration Division provides business support (e.g.,
budget and financial management, human resources, IT, and procurement) for the
various OIG functions and activities.
 The Office of Counsel provides legal and ethics advice to all OIG components;
represents the OIG in litigation arising out of or affecting OIG operations; assists
with the prosecution of criminal, civil, and administrative enforcement matters;
processes subpoenas; responds to Freedom of Information and Privacy Act
requests; and reviews and comments on proposed policies, regulations,
legislation, and procedures.
 The OIG Hotline, under the purview of the Chief of Staff, reviews allegations
of waste, fraud, abuse, or serious mismanagement within the SBA or its programs
from employees, contractors, and the public.39
The SBA OIG’s headquarters is located in Washington, DC. The SBA OIG’s Investigations
Division has 12 field offices located across the United States.40
The SBA OIG’s structure is shown in its organizational chart (see Figure 1).

39 SBA, OIG, “FY2019 Congressional Budget Justification,” p. 222, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/FY_2019_CBJ_Office_of_Inspector_General.pdf (hereinafter SBA, OIG, “FY2019 Congressional
Budget Justification”); and SBA, OIG, “FY2021 Congressional Budget Justification,” pp. 253, 254.
40 The SBA’s Investigations Division has 12 field offices: five in its eastern region: Atlanta, Georgia; Melville, New
York; Miami, Florida; Philadelphia, Pennsylvania; and Washington, DC; four in its central region: Chicago, Illinois;
Detroit, Michigan; Houston, Texas; and Kansas City, Missouri; and three in its western region: Federal Way,
Washington; Lakewood, Colorado; and Norwalk, California. See SBA, “OIG Directory,” at https://www.sba.gov/oig/
oig-directory.
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Figure 1. SBA OIG’s Organizational Chart, FY2020

Source: U.S. Small Business Administration, Office of Inspector General, “SBA OIG Organization Chart,” at
https://www.sba.gov/sites/default/files/oig/SBA_OIG_Organization_Chart.pdf.
Recent Activities
As mentioned previously, the SBA OIG conducts and supervises audits and investigations of the
SBA’s programs and operations. As a complement to its criminal and civil fraud investigations,
the SBA OIG also recommends to the SBA suspensions, debarment, and other administrative
enforcement actions against SBA lenders, borrowers, contractors, and others who have engaged
in fraud or have otherwise exhibited a lack of business integrity. The SBA OIG also conducts,
supervises, and participates in various training activities to counter fraud in SBA programs.
Audit Reports
During FY2019, the SBA OIG issued 23 audit reports containing 94 recommendations for
improving the SBA’s operations. The SBA’s OIG provided several examples in its FY2019 semi-
annual reports to Congress of what it considered to be among its more noteworthy audits,
including the following:
 High Risk 7(a) Loan Review Program. The OIG reviewed eight early-defaulted
7(a) loans and “identified material lender origination and closing deficiencies that
justified denial of the guaranty for five loans in the amount of approximately $8.7
million.”41

41 SBA, OIG, “Semiannual Report to Congress: April 1-September 30, 2019,” p. i, at https://www.sba.gov/document/
report—semiannual-report-congress (hereinafter SBA, OIG, “Semiannual Report to Congress: April 1-September 30,
2019”).
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 Fraud. An OIG investigation resulted in “a former Chief Executive Officer of a
Virginia-based defense contractor agreeing to pay $20 million to settle
allegations related to fraudulent procurement of small business contracts.”42
 SBA Desktop Loss Verification Process. The SBA’s desktop loss verification
process is used to estimate and validate the cost of restoring disaster-damaged
property to its pre-disaster condition. Prior to January 2017, the SBA had loss
verifiers who conducted damage assessments solely through on-site inspections.
The SBA implemented the desktop loss verification process to expedite disaster
loan approvals. The OIG found that “although the process contributed to SBA
meeting its timeliness goals for processing disaster loan applications, controls
needed strengthening to mitigate the risk of fraud and ensure program
integrity.”43 The OIG found that about half of the 73,313 disaster loans it
examined, totaling nearly $600 million, were approved “without validating the
cause and extent of damages, and there was no assurance that disaster loans were
only provided to individuals impacted by Hurricanes Harvey, Irma or Maria.”44
 SBA District Offices’ Customer Service. An OIG audit of SBA district offices’
customer service was conducted in response to a congressional request about the
perceived disparity in the effectiveness of SBA district offices. The OIG found
that the “SBA did not have an effective process in place to assess customer
service and made four recommendations to enhance the overall management of
district offices’ customer service.”45
 7(a) Loans Sold on the Secondary Market. An OIG audit of 7(a) loans sold on
the secondary market “determined that internal controls related to the sale of
loans into the secondary market and SBA’s reviews for lender compliance on
defaulted loans were generally effective.”46
Pandemic Response Audits
On April 3, 2020, the SBA OIG published a white paper concerning risk awareness and lessons
learned from prior audits of economic stimulus loans and another white paper concerning risk
awareness and lessons learned from prior audits of the Economic Injury Disaster Loan (EIDL)
program.47 As mentioned, the CARES Act (P.L. 116-136), enacted on March 27, 2020, created the
Paycheck Protection Program (PPP) to provide low-interest loans to assist small businesses
adversely affected by the Coronavirus Disease 2019 (COVID-19) pandemic.48 More than 5.2

42 SBA, OIG, “Semiannual Report to Congress: April 1-September 30, 2019.”
43 SBA, OIG, “Semiannual Report to Congress: April 1-September 30, 2019.”
44 SBA, OIG, “Semiannual Report to Congress: April 1-September 30, 2019.”
45 SBA, OIG, “Semiannual Report to Congress: October 1, 2018-March 31, 2019,” p. i, at https://www.sba.gov/sites/
default/files/2019-08/SBA-OIG-Spring-2019-Semiannual-Report.pdf.
46 SBA, OIG, “Semiannual Report to Congress: October 1, 2018-March 31, 2019.
47 See SBA, “White Paper: Risk Awareness and Lessons Learned from Prior Audits of Economic Stimulus Loans,” at
https://www.sba.gov/document/report-20-11-white-paper-risk-awareness-lessons-learned-prior-audits-economic-
stimulus-loans; and SBA, “Second White Paper: Risk Awareness and Lessons Learned from Audits and Inspections of
Economic Injury Disaster Loans,” at https://www.sba.gov/document/report-20-12-second-white-paper-risk-awareness-
lessons-learned-audits-inspections-economic-injury-disaster-loans.
48 For additional information and analysis of the small business provisions in the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act; P.L. 116-136), see CRS Report R46284, COVID-19 Relief Assistance to Small
Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry.
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million PPP loans, totaling more than $525 billion, were disbursed through August 8, 2020, when
the program ceased accepting new applications.49 These loans feature a six-month deferment of
payments and loan forgiveness if the borrower meets specified criteria, such as using the loan
proceeds for payroll, mortgage interest, rent, and utilities. For comparative purposes, that loan
approval amount is more than the amount the SBA had approved in all of its loan programs,
including disaster loans, over the previous 29 years (from October 1, 1991, through December 31,
2019; $509.9 billion).50
The CARES Act also provided $10 billion for Emergency EIDL advance payments (grants) and
$562 million for EIDL credit subsidies (each $1 in EIDL credit subsidy supports about $7 in
EIDL lending). In addition, P.L. 116-139, the Paycheck Protection Program and Health Care
Enhancement Act, provided another $10 billion for Emergency EIDL advance payments and $50
billion in EIDL credit subsidy.
The SBA stopped accepting Emergency EIDL advance payment applications on July 11, 2020,
because the program reached its $20 billion authorization limit.51 As of October 18, 2020, the
SBA had approved over 3.6 million COVID-19-related EIDL loans, totaling nearly $192 billion.52
Given the anticipated high demand for PPP and EIDL loans, the SBA OIG initiated a planned
review of the SBA’s implementation of the CARES Act’s SBA lending provisions, focusing on
the PPP and EIDL programs. Based on its ongoing review, and in response to a Senate request for
information about the PPP’s implementation, the SBA OIG issued a “flash report” on the SBA’s
implementation of PPP requirements on May 8, 2020.53
The SBA OIG determined that the regulations published in the SBA’s seven interim final rules,
guidance in the SBA’s 39 Frequently Asked Questions (FAQ) documents, and information
included on the SBA’s PPP borrower application form, as of April 30, 2020, “mostly aligned”
with the CARES Act.54 However, four areas did not fully align with the CARES Act: (1) that the
SBA should issue guidance to lenders that prioritizes the processing and disbursement of PPP
loans to small businesses and entities located in underserved and rural markets, (2) loan proceeds
eligible for forgiveness, (3) guidance on loan deferments, and (4) registration of loans.
Specifically,
 The SBA OIG could not find evidence that the SBA had issued guidance to
lenders “to prioritize the markets indicated by the Act,” and noted that the SBA

49 SBA, “Paycheck Protection Program (PPP) Report: Approvals through August 8, 2020,” at
https://home.treasury.gov/system/files/136/SBA-Paycheck-Protection-Program-Loan-Report-Round2.pdf.
50 SBA, “WDS Lending Data File,” October 18, 2019; and SBA, “Small Business Administration loan program
performance: Table 2 - Gross Approval Amount by Program, December 31, 2019,” at
https://www.sba.gov/document/report-small-business-administration-loan-program-performance.
51 SBA, “SBA provided $20 billion to Small Businesses and Non-Profits Through the Emergency Economic Injury
Disaster Loan Advance Program,” press release, July 11, 2020, at https://www.sba.gov/about-sba/sba-newsroom/press-
releases-media-advisories/sba-provided-20-billion-small-businesses-and-non-profits-through-economic-injury-disaster-
loan.
52 SBA, “Disaster Assistance Update, Nationwide EIDL Loans, October 19, 2020 (figures as of October 18, 2020),” at
https://www.sba.gov/document/report-covid-19-eidl-loans-report-10-19-20.
53 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” Report No. 20-14, May 8, 2020, at https://www.sba.gov/document/report-20-14-flash-report-small-
business-administrations-implementation-paycheck-protection-program-requirements (hereinafter SBA, OIG, “Flash
Report, Small Business Administration’s Implementation of the Paycheck Protection Program Requirements”).
54 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 4.
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did not require demographic data to be collected, which is needed to identify PPP
borrowers in underserved markets. As a result, the SBA OIG concluded that “it is
unlikely that the SBA will be able to determine the loan volume to the intended
prioritized markets.”55 The SBA OIG recommended that the SBA “issue guidance
to lenders requiring the lenders to prioritize borrowers in underserved markets
and revise the PPP borrower application to include the collection of optional
demographic information for principals for the remaining available lending
authority and any future lending under the program.”56 The SBA OIG
recommended that for loans that have already been disbursed, the SBA include
optional demographic information on the forms used to request loan
forgiveness.57
On May 15, 2020, the SBA issued its PPP loan forgiveness application form, which has
been revised several times. That form, and all subsequent revisions, include an optional
form for borrowers to report their demographic information.58 In addition, on June 15,
2020, SBA Administrator Jovita Carranza issued policy guidance to lenders encouraging
them to “redouble your efforts to assist eligible borrowers in underserved and
disadvantaged communities.”59
 The SBA OIG noted that while the CARES Act’s forgiveness provision “did not
create any restrictions on the portion of the loan that needed to be used for
payroll, SBA added a requirement ... that at least 75 percent of the loan proceeds
[for forgiveness purposes] must be used for payroll.”60 The SBA OIG also noted
that the SBA “requires borrowers to repay any amount not eligible for
forgiveness within the remainder of the initial two-year term” even though the
CARES Act allows for a maximum maturity of up to 10 years. The SBA OIG
concluded that the SBA’s forgiveness requirements “could result in an
unintended burden” for tens of thousands of borrowers, including those who have
“more operational expenses than employee expenses.”61 The SBA OIG
recommended that the SBA “evaluate the potential negative impact to borrowers
regarding the specified percentage of loan proceeds eligible for forgiveness and
update the requirements, as deemed necessary.”62

55 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 4.
56 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 6.
57 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 6.
58 SBA, “SBA and Treasury Release Paycheck Protection Program Loan Forgiveness Application,” May 15, 2020, at
https://home.treasury.gov/news/press-releases/sm1010.
59 SBA, “Message from SBA Administrator Jovita Carranza,” June 15, 2020, at
https://www.sba.gov/sites/default/files/2020-
07/SBA%20Administrator%20Letter%20re%20Underserved%20Communities%206-15-20-508.pdf.
60 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 5.
61 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 5.
62 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 6.
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 Congress subsequently passed legislation (P.L. 116-142, the Paycheck Protection
Program Flexibility Act of 2020) that required PPP borrowers to use at least 60%
of their loan proceeds on payroll for full loan forgiveness.
 The SBA OIG could not find evidence, as of May 5, 2020, that the SBA had
issued guidance to lenders concerning the deferment process for PPP loans. The
CARES Act requires the SBA to issue this guidance within 30 days of enactment
(March 27, 2020).63 The SBA OIG recommended that the SBA issue this
guidance.64
The SBA issued a procedural notice on May 21, 2020, informing lenders of their
reporting responsibilities, including the reporting of PPP loan deferments.65
 Although the SBA requires PPP loan applicants to provide their nine-digit
taxpayer identification number (TIN) on the PPP loan application, the SBA OIG
could not find evidence that the SBA had registered PPP loans using the
applicant’s TIN as required by the CARES Act.66 Registration is designed to help
the SBA identify and reject duplicative loan applications. The SBA OIG
recommended that the SBA register PPP loans into a database using the
borrower’s TIN.
The SBA has relied on its online E-Tran loan processing system to detect duplicative loan
applications and on lenders and borrowers to report duplicative loan approvals (see
discussion in the footnote below).67
On July 28, 2020, the SBA OIG issued a ”management alert” indicating that the office had
received “more than 5,000 instances of suspected fraud from financial institutions receiving
economic injury loan deposits” and “an additional 1,220 reports of suspected fraudulent
transactions ... from other financial institutions.”68

63 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 5.
64 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 6.
65 SBA, “Paycheck Protection Program Lender Processing Fee Payment and 1502 Reporting Process,” SBA Procedural
Notice 5000-20028, May 21, 2020, at https://home.treasury.gov/system/files/136/Guidance-on-PPP-Lender-Processing-
Fee-Payment-and-1502-Reporting-Process.pdf; and SBA, “Updated Paycheck Protection Program Lender Processing
Fee Payment and 1502 Reporting Process,” SBA Procedural Notice 5000-20036, July 13, 2020, at
https://home.treasury.gov/system/files/136/PPP--Procedural-Notice--Updated-PPP-Lender-Processing-Fee-Payment-
and-1502-Reporting-Process.pdf.
66 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 6. A taxpayer identification number (TIN) is a unique nine-digit number used to identify an
individual, business, or other entity in tax returns and other documents filed with the Internal Revenue Service (IRS).
The CARES Act requires the SBA to register PPP loans by the borrower’s TIN within 15 days after the loan is made.
67 SBA, OIG, “Flash Report, Small Business Administration’s Implementation of the Paycheck Protection Program
Requirements,” p. 6.
The SBA’s E-Tran loan processing system, which lenders use to submit PPP loan applications, reviews the borrower’s
TIN in an attempt to identify duplicative loan applications. However, the SBA allows borrowers to enter either their
social security number, their TIN, which is usually assigned to businesses that have employees, or their Employer
Identification Number, which is equivalent to the TIN and is available to businesses operating in the United States, on
the PPP loan application form. As a result, it is possible for some borrowers to submit duplicative loan applications
using their social security number on one PPP loan application and their TIN or EIN on another and not be detected by
E-Tran.
68 SBA, OIG, “Serious Concerns of Potential Fraud in Economic Injury Disaster Loan Program Pertaining to the
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Investigations, Debarment Referrals, and Training Activities
In FY2019, the SBA OIG’s investigations resulted in 49 indictments or informations and 36
convictions.69 For example,
 A South Carolina man was sentenced in federal court to 51 months in prison after
pleading guilty to wire fraud following an OIG investigation conducted with
several other federal agencies revealed that the man and another man allegedly
had formed a firm and designated the second man as the majority owner in its
application to the 8(a) program. The firm was in fact controlled at various times
by the subject and a third man through that individual’s two businesses. The
subject and his wife also allegedly formed a second firm and designated her—a
service-disabled veteran—as the owner. That firm was in fact controlled and
operated by the subject. The couple allegedly submitted false applications to the
Department of Veteran Affairs.70
 Following an OIG investigation with several other federal agencies, a Missouri
contractor and the president of a Kansas electric company were indicated in
federal court for “conspiracy, wire fraud, and money laundering related to their
roles in a $346 million contract fraud scheme. A third man, also from Kansas,
pled guilty in federal court to conspiracy to commit wire fraud The indictment
alleged that the three men operated companies with straw owners who qualified a
socially and economically disadvantaged individuals of as service-disabled
veteran but who did not actually control the companies.”71
 Following an OIG investigation with several other federal agencies, a Virginia
man agreed to pay $20 million to settle civil claims related to a fraudulent
scheme in which he and others caused his diving supply firm “to falsely represent
that it qualified as a small business concern when it did not, due to reported
affiliation with a number of other companies. He and others caused the firm to
bid on, receive, and submit claims for payment under contracts it was not eligible
to receive because these contracts were limited to qualified small businesses.”72
The SBA OIG also sent 38 present responsibility actions (suspension and debarment referrals) to
the SBA that resulted in 9 proposed debarments and 14 final debarments.73 As will be discussed

Response to COVID-19,” Report Number 20-16, July 28, 2020, p. 2, at https://www.sba.gov/sites/default/files/2020-
07/SBA_OIG_Report_20-16_508.1.pdf.
69 An information is a sworn written statement that charges that a particular individual has done a criminal act or is
guilty of a criminal omission. Because the Fifth Amendment to the U.S. Constitution expressly creates a constitutional
right to be indicted by a grand jury, an information is used in federal criminal procedure only when a defendant
voluntarily pleads guilty (often as part of a plea bargain) and waives the right to an indictment. See The Free
Dictionary, “Information,” at http://legal-dictionary.thefreedictionary.com/Information; and The Law Dictionary,
“Information,” at http://thelawdictionary.org/information/.
70 SBA, OIG, “Semiannual Report to Congress: April 1-September 30, 2019,” pp. 14, 15.
71 SBA, OIG, “Semiannual Report to Congress: April 1-September 30, 2019,” pp. 16, 17.
72 SBA, OIG, “Semiannual Report to Congress: April 1-September 30, 2019,” p. 17.
73 SBA, OIG, “FY2021 Congressional Budget Justification,” p. 248. Debarred contractors, lenders, and borrowers are
generally ineligible for new federal contracts or SBA loans for a fixed period of time, while suspended contractors,
lenders, and borrowers are generally ineligible for the duration of any investigation or litigation involving their
conduct. See U.S. Congress, House Committee on Small Business, SBA Management and Performance Challenges:
The Inspector General’s Perspective, 114th Cong., 2nd sess., March 16, 2016, H. Hrg. 114-049 (Washington: GPO,
2016), p. 29.
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later, the SBA OIG also annually provides training and outreach sessions, attended by more than
1,000 government employees, lending officials, and law enforcement representatives, on topics
related to fraud in government lending and contracting programs.74
More recently, the SBA OIG has been actively investigating reported PPP and EIDL fraud and
regularly issues press releases related to its role in charging individuals for COVID-19-related
loan fraud.75
Monetary Savings and Recoveries
The SBA OIG reports that its audits and investigations resulted in monetary savings and
recoveries of about $111 million in FY2019 ($72.6 million from potential investigative recoveries
and fines, $4.8 million from asset forfeitures, $0 million for loans or contracts not approved or
canceled, and $33.6 million in disallowed costs agreed to by management).76
Most OIGs, including the SBA OIG, quantify their monetary savings by identifying and reporting
amounts affected by their activities. This methodological approach, arguably, provides a fairly
good overview of the OIG’s activities’ scope, nature, and impact. However, this approach has
limitations. For example, precise data concerning monetary savings are not always readily
available. Also, from a budgetary perspective, the monetary savings identified is sometimes less
than the actual monetary savings realized. For example,
 Savings from potential recoveries and fines ($72.6 million in FY2019) is derived
from the actual amount imposed by courts in criminal sentencings (including
fines and restitution), criminal settlements, and civil settlements. These
recoveries are deemed “potential” because the court ordered them in FY2018, but
they may not have been collected yet. The SBA OIG does not track collections
resulting from these orders. As a result, the SBA OIG is not able to report the
final amount of money actually recovered.77
 Savings from loans or contracts not approved or cancelled (none in FY2019) is
“comprised of the sum of the amounts that would have been borrowed as loans or
awarded via contracts had there been no involvement by the OIG Investigations
Division.”78 From a budgetary perspective, the actual monetary savings generated
by these actions is less than the amount cited.79 When a SBA loan is not
approved, no funds are returned to the SBA because the loan amount has not
been issued yet. When a SBA business loan is cancelled, the loan amount is
ultimately returned to the lender, not to the SBA, because the SBA did not make
the loan, it guaranteed a portion of it. When a small business contract is not
approved, no funds are returned to the agency sponsoring the contract because
the contracted amount has not been awarded yet. When a small business contract

74 U.S. Congress, House Committee on Small Business, SBA Management and Performance Challenges: The Inspector
General’s Perspective, 114th Cong., 2nd sess., March 16, 2016, H. Hrg. 114-049 (Washington: GPO, 2016), p. 29.
75 SBA, OIG, “Pandemic Response Oversight: Press Releases,” at https://www.sba.gov/about-sba/oversight-
advocacy/office-inspector-general/pandemic-response-oversight.
76 SBA, OIG, “FY2021 Congressional Budget Justification,” p. 247.
77 SBA, OIG, “Correspondence with the author,” June 23, 2016.
78 SBA, OIG, “Correspondence with the author.”
79 By promoting program efficiency, it could be argued that these actions cumulatively result in administrative cost
savings. However, it is difficult to quantify these savings.
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is cancelled, the contracted amount is typically made available to other
contractors.
 Savings from disallowed costs agreed to by management ($33.6 million in
FY2019) could result in actual budgetary savings, but the recovery process
typically takes time. As a result, the final savings for disallowed costs is often not
known during the fiscal year in which it is reported.
Finally, estimating the monetary savings from the SBA OIG’s activities is challenging because it
is difficult, if not impossible, to determine what changes the SBA might have made to its
programs and operations if the SBA OIG did not exist.
Perhaps indicative of these methodological challenges, the SBA OIG’s semiannual reports and
annual congressional budget justification document’s statistical highlights sections refer to these
figures as “office-wide dollar accomplishments” as opposed to monetary savings.80
Most Serious Management and Performance
Challenges Facing the SBA
Pursuant to P.L. 106-531, the Records Consolidation Act of 2000, and OMB Circular A-136, the
SBA OIG issues an annual Report on the Most Serious Management and Performance
Challenges Facing the SBA. This report is, arguably, the SBA OIG’s signature oversight
document, focusing attention “on areas that are particularly vulnerable to fraud, waste, error, and
mismanagement, or otherwise pose a significant risk and generally have been subject to one or
more OIG or GAO reports.”81
The FY2021 Report on the Most Serious Management and Performance Challenges Facing the
SBA lists the following eight challenges:
1. SBA’s COVID-19-related economic relief programs are susceptible to significant
fraud risks and vulnerabilities.
2. Inaccurate procurement data and eligibility concerns in the small business
contracting programs undermine the reliability of contracting goal achievements.
3. SBA needs to improve oversight of IT investment and reduce IT security risks.
4. SBA risk management and oversight practices need improvement to ensure the
integrity of loan programs.
5. SBA needs to administer the Section 8(a) business development program
effectively.
6. Identification of improper payments in SBA’s loan program remain a challenge.
7. SBA’s disaster assistance programs must balance competing priorities to deliver
prompt assistance but prevent potential fraud.
8. SBA needs robust grants management oversight.82

80 For example, see SBA, OIG, “FY2019 Congressional Budget Justification,” p. 220.
81 SBA, OIG, “FY2019 Congressional Budget Justification,” p. 207.
82 SBA, OIG, Report on the Most Serious Management and Performance Challenges in Fiscal Year 2021, Report
Number 21-01, October 16, 2020, at https://www.sba.gov/document/report-report-most-serious-management-
performance-challenges-office-inspector-general (hereinafter SBA, OIG, Report on the Most Serious Management and
Performance Challenges in Fiscal Year 2021).
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The SBA OIG provides a series of recommended actions within each of the reported challenges to
enhance the effectiveness of the SBA’s programs and operations. The management challenges are
“driven by SBA’s current needs” and based on the SBA OIG’s understanding of the SBA’s
programs and operations, as well as challenges presented in other agency reports, principally
GAO reports. Accordingly, the challenges presented each year may change based on the SBA’s
actions or inactions “to remedy past weaknesses.”83
For example, in its FY2021 report, the SBA OIG added a new challenge related to the oversight
of COVID-19-related loan programs and removed a challenge concerning the SBA’s human
capital management because the SBA “made substantial improvements to its human capital
strategies,” “implemented plans that aligned talent needs and capability with its strategic plan,”
and “implemented strategic workforce and succession plans to identify competency gaps,
strengthen leadership capacity, and address challenges of its aging workforce.”84
Impact on Program Efficiency and Effectiveness
OIGs are, arguably, best known for investigations addressing waste, fraud, and abuse and audits
containing recommendations to enhance programmatic and operational efficiencies. However, a
full and complete assessment of an OIG’s impact should address all of the office’s statutory
responsibilities, including its efforts to
 enhance programmatic and operational efficiencies and the OIG’s agency’s
effectiveness in achieving program goals through audits;
 reduce waste, fraud, and abuse through investigations;
 assist Congress and the OIG’s agency by making recommendations concerning
the impact of legislation and regulations on programmatic and operational
efficiencies and waste, fraud, and abuse;
 assist the OIG’s agency by making recommendations to facilitate the agency’s
relationships with other governmental and nongovernmental entities; and
 keep the OIG’s agency head and Congress fully and currently informed of its
findings and the agency’s progress in implementing recommended corrective
actions.
Enhancing Programmatic and Operational Efficiency and the
Achievement of Program Goals Through Audits
As shown in Table 3, over the past 10 fiscal years, the SBA OIG
 issued 227 audit reports (an average of 22.7 audit reports per fiscal year);
 provided 1,105 recommendations for improving SBA operations, identifying
improper payments, and strengthening controls to reduce fraud and unnecessary
losses in SBA programs (an average of 110.5 recommendations per fiscal year),
with the SBA taking action on 1,083 recommendations (an average of 108.3
recommendations addressed per fiscal year);

83 U.S. Congress, House Committee on Small Business, SBA Management and Performance Challenges: The Inspector
General’s Perspective, 114th Cong., 2nd sess., March 16, 2016, H. Hrg. 114-049 (Washington: GPO, 2016), pp. 23-24.
84 SBA, OIG, Report on the Most Serious Management and Performance Challenges in Fiscal Year 2021, p. iv.
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 generated $483.3 million in savings and efficiencies (an average of $48.3 million
per fiscal year) in disallowed costs agreed to by SBA management and
recommendations that funds be put to better use agreed to by SBA management;
 questioned $1,258.9 million in costs (an average of $125.9 million per fiscal
year);85 and
 recommended that $141.1 million be put to better use (an average of $14.1
million per fiscal year).
Table 3. SBA OIG’s Audits, FY2010-FY2019
($ in millions)
Number of
Value of
Number Recommendations
Value of
Recommendations
Fiscal
of Audit
Issued/Acted
Dollar Amount in
Costs
That Funds Be Put
Year
Reports
Upona
Accomplishmentsb
Questioned
to Better Use
2019
23
94/91
$111.0
$687.6
$0.0
2018
26
111/119
$145.4
$186.6
$0.0
2017
19
72/72
$2.1
$138.6
$0.0
2016
23
81/84
$3.2
$8.0
$1.3
2015
17
80/84
$15.0
$2.4
$9.1
2014
20
100/137
$93.7
$4.4
$4.8
2013
19
129/109
$42.8
$45.9
$40.7
2012
22
126/113
$8.8
$172.1
$50.7
2011
24
136/168
$60.2
$12.3
$0.0
2010
34
176/106
$1.1
$1.0
$34.5
Total
227
1,105/1,083
$483.3
$1,258.9
$141.1
Sources: U.S. Small Business Administration, Office of Inspector General, “Congressional Budget Justification,
FY2012,” pp. 1, 12, at https://www.sba.gov/sites/default/files/aboutsbaarticle/
FINAL%20FY%202012%20CBJ%20FY%202010%20APR_0.pdf; U.S. Small Business Administration, Office of
Inspector General, “Congressional Budget Justification, FY2013,” p. 11, at https://www.sba.gov/sites/default/files/
files/4-508%20Compliant%20FY%202013%20Office%20of%20Inspector%20General%20CBJ2(1).pdf; U.S. Small
Business Administration, Office of Inspector General, “FY2014 Congressional Budget Justification,” p. 16, at
https://www.sba.gov/sites/default/files/files/4-508%20Compliant%20OIG%20FY%202014%20CBJ.PDF; U.S. Smal
Business Administration, Office of Inspector General, “FY2015 Congressional Budget Justification,” pp. 1, 17, at
https://www.sba.gov/sites/default/files/files/
SBA%20OIG%20FY%202015%20Congressional%20Submission%20508%20FINAL%20post.pdf; U.S. Small Business
Administration, Office of Inspector General, “FY2016 Congressional Budget Justification,” pp. 1, 22, at
https://www.sba.gov/sites/default/files/files/4-Office_of_the_Inspector_General_FY_2016_CBJ_508.pdf; U.S.
Small Business Administration, Office of Inspector General, “FY2017 Congressional Budget Justification,” pp. 1,
21, at https://www.sba.gov/sites/default/files/FY17-CBJ-oig.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY2018 Congressional Budget Justification,” p. 23, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/Office_of_Inspector_General_-_FY_2018_CBJ.pdf; U.S. Smal Business Administration, Office of
Inspector General, “FY2019 Congressional Budget Justification,” p. 220, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/FY_2019_CBJ_Office_of_Inspector_General.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY 2020 Congressional Budget Justification,” p. 227, at https://www.sba.gov/document/

85 The SBA views questioned costs as those that are found to be improper. Unsupported costs may be proper, but lack
documentation. The SBA considers unsupported costs a subset of questioned costs. See SBA, OIG, “Semiannual
Report to Congress, fall 2016,” p. 25, at https://www.sba.gov/sites/default/files/oig/
SAR_Fall_2016_Publication_Draft_-_508.pdf.
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report—congressional-budget-justification-annual-performance-report; and U.S. Small Business Administration,
Office of Inspector General, “FY2021 Congressional Budget Justification,” p. 247, at https://www.sba.gov/
document/report—congressional-budget-justification-annual-performance-report.
a. The number of the SBA OIG’s recommendations acted upon by the SBA in a fiscal year may exceed the
number of recommendations issued by the SBA OIG because the number acted upon may include
recommendations issued in previous fiscal years.
b. Sum of disallowed costs agreed to by management and recommendations that funds be put to better use
agreed to by management.
In terms of impact, the data presented in Table 3 suggest that the SBA has made hundreds of
changes to its internal operating procedures and programs as a direct result of the SBA OIG’s
audits.86 In addition, comments by members of the House Committee on Small Business and
Senate Committee on Small Business and Entrepreneurship during congressional oversight
hearings suggest that they view the SBA OIG’s audits as helpful in their oversight of the SBA,
especially in terms of identifying management weaknesses and recommending solutions to
remedy those weaknesses.87 For example, in his opening remarks at a March 2016 congressional
oversight hearing concerning the SBA’s management and performance challenges,
Representative Steve Chabot, then-chair of the House Committee on Small Business, stated
It is clear that the Inspector General plays a critical role in ensuring effective management
of the SBA. By conducting audits to identify program mismanagement, by investigating
fraud or other wrongdoing, or by recommending changes to increase the efficiency of SBA
operations, she has provided independent and objective reviews of agency actions.88
However, some Members have also noted that the SBA OIG’s impact is limited because the SBA
OIG has no enforcement authority and the SBA has chosen to ignore many of its
recommendations. As Representative Nydia Velazquez noted during that March 2016
congressional oversight hearing, some of the management challenges reported in the SBA OIG’s
annual Report on the Most Serious Management and Performance Challenges Facing the SBA
“were first highlighted over a decade ago.”89 In addition, Peggy Gustafson (SBA IG from October
2, 2009 to January 9, 2017) testified at that hearing that the SBA currently “has 144 open OIG
recommendations pertaining to reviews conducted in recent years and not so recent years across
SBA programs.”90 She also testified that the SBA
did demonstrate positive progress in resolving recommendations associated with five of
the identified challenges [in the annual report on the most serious challenges facing the
SBA]. However, they remained at status quo on four of the challenges and demonstrated
no progress on one recommendation in an area related to information technology. Now,

86 For additional information concerning the SBA OIG’s impact on the SBA’s 7(a) loan guarantee program, see CRS
Report R41146, Small Business Administration 7(a) Loan Guaranty Program, by Robert Jay Dilger.
87 For example, see U.S. Congress, House Committee on Small Business, SBA Management and Performance
Challenges: The Inspector General’s Perspective, 114th Cong., 2nd sess., March 16, 2016 (Washington: GPO, 2016);
and U.S. Congress, House Committee on Small Business, Committee Staff, “Memorandum, Full Committee Hearing:
SBA Management and Performance Challenges: The Inspector General’s Perspective,” March 14, 2016.
88 U.S. Congress, House Committee on Small Business, SBA Management and Performance Challenges: The Inspector
General’s Perspective, 114th Cong., 2nd sess., March 16, 2016 (Washington: GPO, 2016), pp. 1-2 (hereinafter U.S.
Congress, House Committee on Small Business, SBA Management and Performance Challenges: The Inspector
General’s Perspective).
89 U.S. Congress, House Committee on Small Business, SBA Management and Performance Challenges: The Inspector
General’s Perspective, p. 1.
90 U.S. Congress, House Committee on Small Business, SBA Management and Performance Challenges: The Inspector
General’s Perspective, p. 4.
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clearly these results I would say paint a mixed picture relative to SBA’s commitment to
addressing these challenges in earnest and their ability to overcome these challenges.
Having said that, I think it also has to be acknowledged that SBA has shown that with a
sustained, committed effort over time, they can achieve successful results in these
challenges. For example, they moved to green [implemented the SBA OIG’s
recommendations concerning] … the very large challenge related to their LMAS [Loan
Management and Accounting System Modernization] IT system. So I think that really
shows that these are challenges that with the right effort can really be conquered and met.91
Others have suggested that OIGs in general, including the SBA OIG, focus their auditing efforts
on identifying and addressing programmatic and operational inefficiencies and spend less time
addressing “whether the agency program operations were providing the outputs intended by
Congress.”92 In their view, Congress passed P.L. 103-62, the Government Performance and
Results Act of 1993, and P.L. 111-352, the Government Performance and Results Act
Modernization Act of 2010, to provide mechanisms to assess the effectiveness of federal
programs in a way that supplements the efforts of OIGs (e.g., by establishing statutory
requirements for most agencies to set goals, measure performance, and submit related plans and
reports to Congress for its potential use).93
In sum, the evidence suggests that the SBA OIG’s audits have helped to increase the efficiency of
the SBA’s programs and operations. However, it could also be argued that the SBA OIG’s impact
is muted because OIGs lack enforcement authority, meaning that the SBA may proceed with, or
without, taking into account the recommendations presented in the SBA OIG’s audits.
Reducing Waste, Fraud, and Abuse Through Investigations
As shown in Table 4, over the past 10 fiscal years, the SBA OIG
 opened 731 cases (an average of 73.1 cases opened per fiscal year);
 issued 619 indictments or informations (an average of 61.9 indictments or
informations per fiscal year), with 467 convictions (an average of 46.7
convictions per fiscal year);
 generated $1,134.8 million in investigative recoveries and fines, asset forfeitures
attributed to OIG investigations, and loans or contracts not approved or cancelled
as a result of investigations (an average of $113.4 million per fiscal year); and
 recommended 609 suspensions or disbarments (an average of 60.9 per fiscal
year), with the SBA suspending or disbarring 306 of these firms or owners (an
average of 30.6 firms/owners per fiscal year).

91 U.S. Congress, House Committee on Small Business, SBA Management and Performance Challenges: The Inspector
General’s Perspective, p. 4.
92 Barry Pineles, chief counsel, House Committee on Small Business, “Hearing Memorandum: Reducing Duplication
and Promoting Efficiency at the SBA: The Inspector General’s View,” June 3, 2013 (hereinafter Barry Pineles, House
Committee on Small Business, “Hearing Memorandum: Reducing Duplication and Promoting Efficiency at the SBA:
The Inspector General’s View”).
93 Barry Pineles, “Hearing Memorandum: Reducing Duplication and Promoting Efficiency at the SBA: The Inspector
General’s View,” pp. 6-8. For additional information and analysis concerning P.L. 103-62, the Government
Performance and Results Act of 1993, and P.L. 111-352, the Government Performance and Results Act Modernization
Act of 2010, see CRS Report R42379, Changes to the Government Performance and Results Act (GPRA): Overview of
the New Framework of Products and Processes, by Clinton T. Brass.
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The SBA OIG also reported that it has an active, annual caseload of about 240 criminal and civil
fraud investigations of potential loan and contracting fraud and other wrongdoing and that “many
of these investigations involve complex, multi-million-dollar fraudulent financial schemes
perpetrated by multiple suspects.”94
The data presented in Table 4 suggest that the SBA OIG’s investigations have resulted in
hundreds of criminal convictions and millions of dollars in recovered funds. In addition,
comments by members of the House Committee on Small Business and Senate Committee on
Small Business and Entrepreneurship suggest that, generally speaking, they acknowledge and
value the SBA OIG’s investigations as a means to identify and reduce waste, fraud, and abuse.95
However, the SBA’s former IG, Peggy Gustafson, has testified that the SBA OIG’s investigative
efforts, in initiating and continuing investigations, are constrained by resource limitations.
Table 4. SBA OIG’s Investigations, FY2010-FY2019
($ in millions)
Number of
Suspensions and
Number of
Recoveries and
Debarments
Fiscal
Number of
Indictments and
Number of
Management
Recommended/
Year
Cases Opened
Informations
Convictionsa
Avoidancesb
Issuedc
2019
59
49
36
$77.4
38/33
2018
73
62
43
$79.0
84/17
2017
86
35
25
$79.9
106/33
2016
104
45
41
$141.5
75/32
2015
78
52
57
$118.8
74/46
2014
51
103
67
$76.2
50/42
2013
50
64
51
$348.2
65/26
2012
65
59
59
$81.8
45/31
2011
85
69
47
$60.7
41/30
2010
80
81
41
$71.3
31/16
Total
731
619
467
$1,134.8
609/306
Sources: U.S. Small Business Administration, Office of Inspector General, “Semiannual Report to Congress,
Spring 2010,” p. 24, at https://www.sba.gov/sites/default/files/oig/oig%20spring%202010%20sar.pdf; U.S. Small
Business Administration, Office of Inspector General, “Semiannual Report to Congress, Fall 2010,” p. 24, at
https://www.sba.gov/sites/default/files/oig/Semiannual%20Report%20to%20Congress%20-%20Fall%202010_0.pdf;
U.S. Small Business Administration, Office of Inspector General, “Congressional Budget Justification FY2012,” pp.
1, 12, 13, at https://www.sba.gov/sites/default/files/aboutsbaarticle/
FINAL%20FY%202012%20CBJ%20FY%202010%20APR_0.pdf; U.S. Small Business Administration, Office of
Inspector General, “Congressional Budget Justification, FY2013,” pp. 11-12, at https://www.sba.gov/sites/default/
files/files/4-508%20Compliant%20FY%202013%20Office%20of%20Inspector%20General%20CBJ2(1).pdf; U.S.
Small Business Administration, Office of Inspector General, “FY2014 Congressional Budget Justification,” pp. 2,
16, 17, at https://www.sba.gov/sites/default/files/files/4-508%20Compliant%20OIG%20FY%202014%20CBJ.PDF;

94 SBA, OIG, “FY2021 Congressional Budget Justification,” p. 225.
95 For example, see U.S. Congress, House Committee on Small Business, SBA Management and Performance
Challenges: The Inspector General’s Perspective, 114th Cong., 2nd sess., March 16, 2016 (Washington: GPO, 2016),
pp. 2, 7-8, 12; and U.S. Congress, House Committee on Small Business, Committee Staff, “Memorandum, Full
Committee Hearing: SBA Management and Performance Challenges: The Inspector General’s Perspective,” March 14,
2016.
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U.S. Small Business Administration, Office of Inspector General, “FY2015 Congressional Budget Justification,” pp.
1, 15, 17, 18, at https://www.sba.gov/sites/default/files/files/
SBA%20OIG%20FY%202015%20Congressional%20Submission%20508%20FINAL%20post.pdf; U.S. Small Business
Administration, Office of Inspector General, “FY2016 Congressional Budget Justification,” pp. 1, 22, 23, at
https://www.sba.gov/sites/default/files/files/4-Office_of_the_Inspector_General_FY_2016_CBJ_508.pdf; U.S.
Small Business Administration, Office of Inspector General, “FY2017 Congressional Budget Justification,” pp. 1,
22, 23, at https://www.sba.gov/sites/default/files/FY17-CBJ-oig.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY2018 Congressional Budget Justification,” pp. 23, 24, at https://www.sba.gov/sites/default/
files/aboutsbaarticle/Office_of_Inspector_General_-_FY_2018_CBJ.pdf; U.S. Smal Business Administration,
Office of Inspector General, “FY2019 Congressional Budget Justification,” pp. 220, 221, at https://www.sba.gov/
sites/default/files/aboutsbaarticle/FY_2019_CBJ_Office_of_Inspector_General.pdf; U.S. Small Business
Administration, Office of Inspector General, “FY 2020 Congressional Budget Justification,” pp. 227, 228, at
https://www.sba.gov/document/report—congressional-budget-justification-annual-performance-report; and U.S.
Small Business Administration, Office of Inspector General, “FY2021 Congressional Budget Justification,” pp. 247,
248, at https://www.sba.gov/document/report—congressional-budget-justification-annual-performance-report.
Notes:
a. The number of convictions may exceed the number of indictments and informations in a fiscal year because
a conviction in any fiscal year could result from an indictment or information issued in that fiscal year or a
previous fiscal year.
b. Sum of potential investigative recoveries and fines, asset forfeitures attributed to OIG investigations, loans
or contracts not approved or cancelled as a result of investigations, and loans not made as a result of name
checks.
c. The number of suspensions and debarments issued by the SBA in response to a recommendation from the
SBA OIG does not include the number of recommended suspensions and debarments pending at the end of
the fiscal year.
Recommendations Concerning the Impact of Legislation and
Regulations
The SBA OIG reports that it routinely reviews and comments on proposed changes to the SBA’s
program directives.96 These changes “include regulations, internal operating procedures, policy
notices, and SBA forms completed by lenders and the public.”97
The SBA OIG also tracks, reviews, and comments on legislation affecting the SBA and
participates in OMB’s Legislative Referral Memoranda (LRM) process for reviewing and
coordinating agency recommendations on proposed, pending, and enrolled legislation.98 The SBA
OIG also “receives, through the SBA Office of Congressional and Legislative Affairs, congress-
related documents being circulated by OMB, including pending legislation for consideration of
Administration views and perspectives.”99
When the SBA OIG identifies “material weaknesses” in changes proposed by the SBA, it “works
with the Agency to implement recommended revisions to promote controls that are more effective
and deter waste, fraud, or abuse.”100 The SBA OIG provides the SBA with both formal and
informal comments. Formal comments are provided “through the Agency’s internal document
control process, the Correspondence Management System (CMS),101 and as a reviewing party in

96 SBA, OIG, “FY2021 Congressional Budget Justification,” p. 241.
97 SBA, OIG, “FY2021 Congressional Budget Justification,” p. 241.
98 See U.S. Office of Management and Budget, “Circular No. A-19, Legislative Coordination and Clearance
(9/20/1979),” at https://www.whitehouse.gov/wp-content/uploads/2017/11/Circular-019.pdf.
99 SBA, OIG, “Correspondence with the author,” July 5, 2016.
100 SBA, OIG, “FY2021 Congressional Budget Justification,” p. 241.
101 The SBA’s CRM-Correspondence Management (CRM-CM) system “will efficiently manage, organize, search,
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the Agency’s Paperwork Reduction Act (PRA) process.”102 Informal comments “occur in the
context of program officials seeking SBA OIG guidance when preparing new guidance.”103
In terms of legislation, the SBA OIG provides comments and suggestions “directly with
congressional stakeholders” and shares its views with SBA officials and OMB if the legislation is
being “circulated for solicited views by OMB through its LRM process, or if determined by the
OIG to be a necessary course of action.”104
As shown in Table 5, over the past 10 fiscal years, the SBA OIG
 conducted 1,147 reviews of legislation, regulations, standard operating
procedures, and other issuances (an average of 114.7 reviews per fiscal year);105
and
 submitted comments on 552 of these initiatives (an average of 55.2 initiatives
commented on per fiscal year).
Table 5. Legislation, Regulations, Standard Operating Procedures (SOPs), and Other
Issuances Reviewed and Comments Provided, FY2010-FY2019
Fiscal
Legislation, Regulations, SOPs, and
Number of Initiatives for Which Comments
Year
Other Issuances Reviewed
Were Provided
2019
112
37
2018
114
43
2017
101
36
2016
119
52
2015
129
72
2014
93
46
2013
115
60
2012
136
79
2011
133
80

track, and report on correspondence and action plans... The CRM-CM will store and manage correspondence from the
members of the U.S. House of Representatives and the U.S. Senate, the President, and SBA’s Administrator or Deputy
Administrator.” See SBA, “Privacy Impact Assessment: Name of System/Application: CRM-Correspondence
Management Program Office: Office of the Executive Secretariat,” at https://www.sba.gov/sites/default/files/files/
CRM_Correspondence_Management.pdf.
102 SBA, OIG, “Correspondence with the author,” July 5, 2016. “OIRA [the Office of Information and Regulatory
Affairs] was created within OMB [the Office of Management and Budget] by Section 3503 of the Paperwork
Reduction Act (PRA) of 1980 (44 U.S.C. Chapter 35) ...With regard to paperwork reduction, the act generally
prohibited agencies from conducting or sponsoring a collection of information until they had submitted their proposed
information collection requests to OIRA and the office had approved those requests. The PRA’s requirements cover
rules issued by virtually all agencies, including Cabinet departments, independent agencies, and independent regulatory
agencies and commissions. Although the PRA gave OIRA substantive responsibilities in many areas, the bulk of the
office’s day-to-day activities under the act were initially focused on reviewing and approving agencies’ proposed
information collection requests.” For additional information and analysis concerning the PRA see CRS Report
RL32397, Federal Rulemaking: The Role of the Office of Information and Regulatory Affairs, coordinated by Maeve P.
Carey, and CRS Report RL32240, The Federal Rulemaking Process: An Overview, coordinated by Maeve P. Carey.
103 SBA, OIG, “Correspondence with the author,” July 5, 2016.
104 SBA, OIG, “Correspondence with the author,” July 5, 2016.
105 Other issuances include policy notices, procedural notices, the SBA Administrator’s action memoranda, and other
SBA initiatives, which frequently involve the implementation of new programs or policies.
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Fiscal
Legislation, Regulations, SOPs, and
Number of Initiatives for Which Comments
Year
Other Issuances Reviewed
Were Provided
2010
95
47
Total
1,147
552
Sources: U.S. Small Business Administration, Office of Inspector General, “Semiannual Report to Congress,
Spring 2010,” p. 22, at https://www.sba.gov/sites/default/files/oig/oig%20spring%202010%20sar.pdf; U.S. Small
Business Administration, Office of Inspector General, “Semiannual Report to Congress, Fall 2010,” p. 21, at
https://www.sba.gov/sites/default/files/oig/Semiannual%20Report%20to%20Congress%20-%20Fall%202010_0.pdf;
U.S. Small Business Administration, Office of Inspector General, “Congressional Budget Justification FY2012,” p.
12, at https://www.sba.gov/sites/default/files/aboutsbaarticle/
FINAL%20FY%202012%20CBJ%20FY%202010%20APR_0.pdf; U.S. Small Business Administration, Office of
Inspector General, “Semiannual Report to Congress, Spring 2011,” p. 17, at https://www.sba.gov/sites/default/
files/oig/Semi-Annual%20Report%20to%20Congress%20-%20Spring%202011.pdf; U.S. Small Business
Administration, Office of Inspector General, “Semiannual Report to Congress, Fall 2011,” p. 17, at
https://www.sba.gov/sites/default/files/oig/Fall%202011%20SBA%20OIG%20SAR.pdf; U.S. Small Business
Administration, Office of Inspector General, “Congressional Budget Justification, FY2013,” p. 11, at
https://www.sba.gov/sites/default/files/files/4-
508%20Compliant%20FY%202013%20Office%20of%20Inspector%20General%20CBJ2(1).pdf; U.S. Small Business
Administration, Office of Inspector General, “Semiannual Report to Congress, Spring 2012,” p. 20, at
https://www.sba.gov/sites/default/files/oig/SBA%20OIG%20SAR%20Spring%202012%20.pdf; U.S. Small Business
Administration, Office of Inspector General, “Semiannual Report to Congress, Fall 2012,” p. 20, at
https://www.sba.gov/sites/default/files/oig/FINAL_FALL%202012_SAR.pdf; U.S. Small Business Administration,
Office of Inspector General, “FY2014 Congressional Budget Justification,” p. 17, at https://www.sba.gov/sites/
default/files/files/4-508%20Compliant%20OIG%20FY%202014%20CBJ.PDF; U.S. Small Business Administration,
Office of Inspector General, “Semiannual Report to Congress, Spring 2013,” p. 19, at https://www.sba.gov/sites/
default/files/oig/SBA%20OIG%20_Spring_%202013_SAR.pdf; U.S. Small Business Administration, Office of
Inspector General, “Semiannual Report to Congress, Fall 2013,” p. 18, at https://www.sba.gov/sites/default/files/
oig/Fal _2013_-_SBA_OIG_SAR_0.pdf; U.S. Smal Business Administration, Office of Inspector General, “FY2015
Congressional Budget Justification,” p. 15, at https://www.sba.gov/sites/default/files/files/
SBA%20OIG%20FY%202015%20Congressional%20Submission%20508%20FINAL%20post.pdf; U.S. Small Business
Administration, Office of Inspector General, “FY2016 Congressional Budget Justification,” p. 23, at
https://www.sba.gov/sites/default/files/files/4-Office_of_the_Inspector_General_FY_2016_CBJ_508.pdf; U.S.
Small Business Administration, Office of Inspector General, “FY2017 Congressional Budget Justification,” p. 22, at
https://www.sba.gov/sites/default/files/FY17-CBJ-oig.pdf; U.S. Small Business Administration, Office of Inspector
General, “FY2018 Congressional Budget Justification,” p. 24, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/Office_of_Inspector_General_-_FY_2018_CBJ.pdf; U.S. Smal Business Administration, Office of
Inspector General, “FY2019 Congressional Budget Justification,” p. 221, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/FY_2019_CBJ_Office_of_Inspector_General.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY 2020 Congressional Budget Justification,” p. 228, at https://www.sba.gov/document/
report—congressional-budget-justification-annual-performance-report; and U.S. Small Business Administration,
Office of Inspector General, “FY2021 Congressional Budget Justification,” p. 248, at https://www.sba.gov/
document/report—congressional-budget-justification-annual-performance-report.
Note: Other issuances include policy notices, procedural notices, the SBA Administrator’s action memoranda,
and other SBA initiatives, which frequently involve the implementation of new programs or policies.
The data in Table 5 suggest that the SBA OIG actively reviews and comments on legislation and
SBA program directives. However, it is difficult to determine the impact of these reviews and
comments because the SBA OIG does not track or report data concerning the SBA’s response to
these comments. The SBA OIG indicated that
neither the dynamic nature of the informal comment process nor the collaborative follow-
up procedures from formal comments are conducive to quantification.... Our sense of these
comments is that the Agency will generally act upon SBA OIG comments. Typically, the
Agency modifies clearances and PRA packages in response to material SBA OIG concerns.
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An accurate tracking and quantification of these clearances, however, is unlikely to yield
particularly useful data relative to the resource expenditure necessary for that collection.106
Facilitating the SBA’s Relationships with Other Governmental and
Nongovernmental Entities
The SBA OIG provides training and outreach sessions on topics related to fraud in government
lending and contracting programs. These training and outreach sessions are designed to facilitate
the SBA’s relationships with other governmental and nongovernmental entities in identifying and
ameliorating fraud.
The SBA OIG’s outreach and training sessions are attended by SBA and other government
employees, lending officials, and law enforcement representatives.107 Topics include “types of
fraud, fraud indicators and trends; how to report suspicious activity that may be fraudulent;
suspension and debarment, the Program Fraud Civil Remedies Act, and other topics related to
deterring and detecting fraud in government lending and contracting programs.”108
As shown in Table 6, the SBA OIG provided 774 outreach and training sessions from FY2010 to
FY2019 (an average of 77.4 sessions per fiscal year) to 14,760 attendees (an average of 1,476
attendees per fiscal year).
Table 6. Outreach and Training Sessions, FY2010-FY2019
Fiscal
Year
Number of Sessions
Number of Attendees
2019
165
1,482
2018
184
1,933
2017
220
3,556
2016
74
1,717
2015
28
1,067
2014
25
1,370
2013
19
900
2012
24
1,100
2011
24
1,130
2010
11
505
Total
774
14,760
Sources: U.S. Small Business Administration, Office of Inspector General, “Semiannual Report to Congress,
Spring 2010,” p. 22, at https://www.sba.gov/sites/default/files/oig/oig%20spring%202010%20sar.pdf; U.S. Small
Business Administration, Office of Inspector General, “Semiannual Report to Congress, Fall 2010,” p. 21, at
https://www.sba.gov/sites/default/files/oig/Semiannual%20Report%20to%20Congress%20-%20Fall%202010_0.pdf;
U.S. Small Business Administration, Office of Inspector General, “Semiannual Report to Congress, Spring 2011,”
p. 17, at https://www.sba.gov/sites/default/files/oig/Semi-Annual%20Report%20to%20Congress%20-
%20Spring%202011.pdf; U.S. Small Business Administration, Office of Inspector General, “Semiannual Report to
Congress, Fall 2011,” p. 16, at https://www.sba.gov/sites/default/files/oig/

106 SBA, OIG, “Correspondence with the author,” July 5, 2016.
107 SBA, OIG, “FY2017 Congressional Budget Justification,” p. 19, at https://www.sba.gov/sites/default/files/FY17-
CBJ-oig.pdf (hereinafter SBA, OIG, “FY2017 Congressional Budget Justification”).
108 SBA, OIG, “FY2017 Congressional Budget Justification,” p. 19.
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Fall%202011%20SBA%20OIG%20SAR.pdf; U.S. Small Business Administration, Office of Inspector General,
“Semiannual Report to Congress, Spring 2012,” p. 21, at https://www.sba.gov/sites/default/files/oig/
SBA%20OIG%20SAR%20Spring%202012%20.pdf; U.S. Small Business Administration, Office of Inspector General,
“Semiannual Report to Congress, Fall 2012,” p. 17, at https://www.sba.gov/sites/default/files/oig/
FINAL_FALL%202012_SAR.pdf; U.S. Small Business Administration, Office of Inspector General, “FY2014
Congressional Budget Justification,” p. 15, at https://www.sba.gov/sites/default/files/files/4-
508%20Compliant%20OIG%20FY%202014%20CBJ.PDF; U.S. Small Business Administration, Office of Inspector
General, “FY2015 Congressional Budget Justification,” p. 16, at https://www.sba.gov/sites/default/files/files/
SBA%20OIG%20FY%202015%20Congressional%20Submission%20508%20FINAL%20post.pdf; U.S. Small Business
Administration, Office of Inspector General, “FY2016 Congressional Budget Justification,” pp. 3, 20, at
https://www.sba.gov/sites/default/files/files/4-Office_of_the_Inspector_General_FY_2016_CBJ_508.pdf; U.S.
Small Business Administration, Office of Inspector General, “FY2017 Congressional Budget Justification,” pp. 2,
19, at https://www.sba.gov/sites/default/files/FY17-CBJ-oig.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY 2020 Congressional Budget Justification,” p. 207, at https://www.sba.gov/document/
report—congressional-budget-justification-annual-performance-report; and U.S. Small Business Administration,
Office of Inspector General, “FY2021 Congressional Budget Justification,” p. 227, at https://www.sba.gov/
document/report—congressional-budget-justification-annual-performance-report.
The data presented in Table 6 suggest that the SBA OIG actively provides training and outreach
sessions related to identifying and addressing fraud. The office also participates in a number of
activities involving federal agencies and others with an interest in fraud prevention activities. It is
difficult to measure the impact of these training and outreach activities on the SBA’s interaction
with other federal agencies. The SBA OIG reports that these sessions are well-attended, and
receive high ratings from attendees.
Keeping the SBA Administrator and Congress Fully and Currently
Informed
As mentioned previously, the IG Act requires IGs to keep their agency’s administrator and
Congress fully and currently informed concerning fraud and other serious problems, abuses, and
deficiencies relating to the agency’s administration of its programs and operations and to report
on the progress made in implementing recommended corrective action. The SBA OIG’s
informational role is conducted through both formal and informal communication.
Formal communication occurs through (1) the publication of audits, investigations, semiannual
reports, and the annual Report on the Most Serious Management and Performance Challenges
Facing the SBA; (2) correspondence with SBA officials, congressional staff, and Members of
Congress; (3) briefings with SBA officials, congressional staff, and Members of Congress (as
needed or as requested); (4) press releases; and occasionally (5) congressional testimony.109
Informal communication occurs primarily through telephone consultation or by email with SBA
officials, congressional staff, and Members of Congress (often facilitated by the SBA OIG’s chief
of staff).110
In terms of communication with Congress, the SBA OIG reports that it “has regular
communications and meetings (as needed or requested) to keep the Congress apprised of
significant findings or issues identified during our oversight of SBA” and that the “OIG has a
staff member that is responsible for congressional relations.”111 In addition, because its

109 The SBA IG testified before Congress six times in 2011, once in 2012, three times in 2013, three times in 2014,
none in 2015, once in 2016, four times in 2017, and once in 2018 (to date). See SBA, “Congressional Testimony,” at
https://www.sba.gov/oig/category/oig-navigation-structure/reading-room/congressional-testimony.
110 SBA, OIG, “Correspondence with the author,” June 23, 2016.
111 SBA, OIG, “Correspondence with the author,” June 23, 2016.
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semiannual reports to Congress are published every six months, the SBA OIG finds that those
reports’ “utility as a viable means to make a recommendation for legislation advancing through
the legislative process is limited in the context of current legislative affairs.”112 As a result,
because “the legislative process is very dynamic,” the SBA OIG often relies on “frequent and
informal” communication with congressional staff and Members of Congress to provide its input
on legislation and other matters affecting the SBA, often by telephone and email.113
The SBA OIG reports frequent and, in its view, meaningful consultation with both the SBA and
Congress in an attempt to keep them fully informed of its activities and recommendations. It is
difficult to determine the impact and/or extent of the SBA OIG’s communication with SBA
officials, congressional staff, and Members of Congress because much of that communication
occurs through informal means, is not tracked, and data concerning the SBA’s or congressional
response to the provided comments and recommendations are not compiled or reported. However,
at the aforementioned March 2016 congressional hearing on the SBA’s management and
performance challenges, Representative Steve Chabot stated that
By clarifying the specific areas in which improvement is needed and highlighting possible
paths forward for the agency, the insights offered by the Inspector General are invaluable
as the Committee continues to work with the SBA to develop meaningful solutions to its
management and performance challenges.114
Relationship with Congress
Generally speaking, OIGs’ relationships with Congress tend to ebb and flow over time, varying
with the personalities, interests, needs, and actions of the principals involved. One constant has
been a genuine interest from Members of Congress of both political parties in OIGs’ efforts to
identify and reduce waste, fraud, and abuse and enhance program efficiency and effectiveness.
The congressional interest in these issues can take on a partisan, contentious tone, especially
during periods of divided government. The House and Senate Committees on Small Business,
however, have traditionally tried to avoid partisanship. For example, at a potentially contentious
Senate Committee on Small Business and Entrepreneurship hearing in 2007, then-Senate
Committee Chair John Kerry stated, “Senator Snowe [then-ranking Member] and I and all
Members of this Committee manage a Committee that works in a very bipartisan way and try
very hard to keep the politics off the table.”115 More recently, Representative Steve Chabot stated
the following during House floor consideration of H.R. 208, the Recovery Improvements for
Small Entities After Disaster Act of 2015:
I want to offer a special thanks to our committee’s ranking member, Ms. Velazquez, for
her insight and leadership on this issue and for working in a bipartisan, bicameral manner,
as she does. I have seen that as chair of the Small Business Committee that I chair now,
but I have also been the ranking member under her when she was chair, and it was always
bipartisan. We have worked together in a very collegial manner, and I thank her for that.116

112 SBA, OIG, “Correspondence with the author,” July 5, 2016.
113 SBA, OIG, “Correspondence with the author,” July 5, 2016.
114 U.S. Congress, House Committee on Small Business, SBA Management and Performance Challenges: The
Inspector General’s Perspective, 114th Cong., 2nd sess., March 16, 2016 (Washington: GPO, 2016), p. 2.
115 U.S. Congress, Senate Committee on Small Business and Entrepreneurship, SBA Lender Oversight: Preventing
Loan Fraud and Improving Regulation of Lenders, 110th Cong., 1st sess., November 13, 2007, S.Hrg. 110-504
(Washington: GPO, 2008), p. 1.
116 Rep. Steve Chabot, “Superstorm Sandy Relief and Disaster Loan Program Improvement Act of 2015,” House
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The extent to which the small business committees have been able to avoid partisan conflict has
varied somewhat over time, reflecting the personalities of committee leaders and the nature of the
issues that have presented themselves at any given time. Nonetheless, the small business
committees’ tradition of valuing bipartisanship has served to reduce the potential for conflict with
the SBA OIG, primarily because committee members generally do not feel a need to question the
SBA OIG’s motives when its investigations and audits find perceived weaknesses in the
Administration’s implementation of the SBA’s programs or in the Administration’s efforts to
identify and address waste, fraud, and abuse. The expectation that both committee members and
the SBA IG do not, and should not, pursue a political agenda may help to explain why small
business committee members rarely ask the SBA OIG to undertake specific studies.117 In their
view, the SBA IG is expected to aggressively pursue perceived weaknesses in the SBA’s
programs and operations regardless of potential political consequences. Requesting specific
studies could be seen as suggesting that the SBA OIG is not doing its job well, or as a partisan
effort to embarrass the Administration.
The SBA OIG’s relationship with Congress has not always been without controversy. For
example, in October 2008, then-Senator John Kerry, chair of the Senate Committee on Small
Business and Entrepreneurship, criticized the SBA OIG on the Senate floor for issuing what he
described as “a heavily redacted report” concerning the SBA’s oversight of one of the agency’s
largest 7(a) lenders. Speaking on behalf of himself and then-Ranking Member Senator Olympia
Snowe, he accused the SBA OIG of not exercising “independent authority on what was redacted
and instead let the agency it was investigating dictate that large sections of the report be redacted
... contrary to the usual process that occurs with SBA OIG reports.”118 He argued that the SBA
OIG’s action had “the potential to render the OIG useless,” and “prevented accountability in
Government by keeping from the public information about the oversight capabilities of an agency
that, though comparatively small, can have a huge impact on our economy.”119
Senator Kerry’s comments illustrate how quickly an OIG’s relationship with Congress can
change. Prior to the publication of that redacted report, the SBA OIG was generally praised by
Members of both political parties for its efforts concerning the oversight of the SBA’s response to
the 2005 Gulf Coast hurricanes, audits of the SBA’s oversight of lenders, and investigations
leading to numerous indictments and convictions of fraudulent SBA lenders and borrowers.
In sum, comments by House and Senate small business committee leaders seem to suggest that
they view the SBA OIG and GAO as two valuable assets that can assist and enhance the
committees’ oversight role. However, history has shown that an apparent harmonious relationship
between an OIG and congressional committees can change quickly as circumstances change.
Some areas of possible congressional interest concerning the SBA OIG, other than funding and
staffing issues, include exploring ways to more accurately quantify the SBA OIG’s claims of

debate, Congressional Record, vol. 161, part 168 (November 16, 2015), p. H8226.
117 In FY2014, none of the 20 reports issued by the SBA OIG were undertaken due to a request from a Member of
Congress or congressional staff, or a member of the public. One report was undertaken in response to a hotline
complaint from SBA program officials. In FY2015, none of the 17 reports issued by the SBA OIG were undertaken due
to a request from a Member of Congress or congressional staff, an SBA employee, or a member of the public. SBA,
OIG, “Correspondence with the author,” June 23, 2016.
118 Sen. John Kerry, “Report of the SBA Inspector General,” remarks in the Senate, Congressional Record, vol. 154,
part 160 (October 2, 2008), pp. S10468-S10470. Also, see U.S. Congress, Senate Committee on Small Business and
Entrepreneurship, SBA Lender Oversight: Preventing Loan Fraud and Improving Regulation of Lenders, 110th Cong.,
1st sess., November 13, 2007, S.Hrg. 110-504 (Washington: GPO, 2008), pp. 1-6, 31-45, 109-112.
119 Sen. John Kerry, “Report of the SBA Inspector General,” remarks in the Senate, Congressional Record, vol. 154,
part 160 (October 2, 2008), p. S10469.
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monetary savings and determining if the SBA OIG should undertake additional tracking and
monitoring activities to more accurately quantify the office’s impact on SBA programs and
operations and legislation.

Author Information

Robert Jay Dilger

Senior Specialist in American National Government

Disclaimer
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