The Small Business Administration Inspector General released an initial report on Thursday regarding the agency’s Economic Injury Disaster Loan program, which made funds available to struggling businesses throughout the pandemic.
The report claimed that $14.3 billion in potentially fraudulent loans were put into accounts that differed from ones listed on applications, while $62.7 billion was potentially doled out to applicants using duplicate information (such as IP addresses, email addresses, business addresses). Another $1.1 billion is believed to have gone to ineligible recipients.
The report noted that there may have been legitimate reasons for these discrepancies, but questioned whether SBA dug deep enough into the details.
A source familiar with the agency told FOX Business’ Edward Lawrence the report is a “political hit job” that was rushed and pushed out ahead of the election.
The same source said the agency is expecting something similar regarding PPP loans to be released before Election Day, as well.
A spokesperson for the SBA said in a statement to FOX Business that the agency disagreed with the report regarding the extent of fraud in the program, labeling its conclusions, assumptions and methodology as wrong.
“The SBA takes the issue of fraud and misuse of taxpayer funds very seriously,” the spokesperson said. “That is why, from the very beginning of the pandemic and the COVID EIDL program, SBA imposed a set of rigorous, comprehensive internal controls, both automated and manual, to combat and mitigate the risk of fraud. The OIG failed to highlight this important fact in its report.”
The report includes a SBA response criticizing the results, which researchers disagreed with.
“OIG agrees that there are valid loans within the loan portfolio where there is little or no assurance of fraud prevention or of eligibility; however, such examples provide a scant retort in context of the billions of taxpayer dollars at stake,” the report stated.
As of Oct. 19, the SBA said more than $191 billion in EIDLs was approved for coronavirus relief.
FOX Business’ Edward Lawrence contributed to this report.