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Washington, D.C. — U.S. Senator Marco Rubio (R-FL), Chairman of the Senate Committee on Small Business and Entrepreneurship, released the following statement after the U.S. Small Business Administration’s (SBA) Office of Inspector General (OIG) released a report finding the Office of Disaster Assistance negligent in its oversight of its online system, which resulted in nearly $600 million of unverified loans.
“When disaster strikes, our communities and small businesses rely on programs like SBA’s disaster loans, to rebuild and recover,” Rubio said. “The pattern of SBA’s gross lack of oversight, which has led to egregious waste, fraud, and abuse throughout the agency’s programs, is deeply unsettling. As Chairman, the agency’s inability to protect taxpayer dollars and provide effective services to America’s small businesses will not go unchecked.”
Since January of 2017, the SBA has performed remote site inspections to determine the cost of restoring damaged property to its pre-disaster conditions called, Desktop Loss Verification. The SBA OIG found that SBA officials did not validate the cause and extent of replacement costs prior to disbursing federal loans. The SBA also inappropriately used FEMA inspection reports that did not contain sufficient validation of damages and losses needed to verify their desktop system. This resulted in SBA disbursing over 36,000 loans totaling $594,286,878, without validation. There was also no assurance that disaster loans were even made to disaster survivors impacted by Hurricanes Harvey, Irma or Maria.