WASHINGTON, D.C. — On Tuesday, President Biden signed a bill to extend the Paycheck Protection Program to give small businesses more time to apply for loans. But there are questions about program oversight and where some of that money is ending up.
The government is spending $900 billion to help small businesses across the country hurt by the coronavirus pandemic.
According to Mike Ware, inspector general of the Small Business Administration, reports of fraud have been off the charts.
“We have received nearly 150,000 complaints on our hotline since March of last year. This is more than 150 years’ worth of complaints when you look at previous years,” Ware said.
The Small Business Administration has two loan programs in place to help struggling business owners.
Channel 11 obtained a government report which shows more than $175 million of PPP funds went to potentially ineligible businesses.
And, in an effort to get the money out quickly, the report states the Small Business Administration had “limited safeguards” for the two loan programs.
“The agency has not yet conducted a formal fraud risk assessment for either program,” said William B. Shear from the U.S. Government Accountability Office.
On Capitol Hill, the new leader of the Small Business Administration was asked what she plans to do about it.
“I would prioritize the reduction of fraud, waste and abuse, as well as implementing controls and systems and leveraging the technology systems and new technology systems to ensure that the program gets into the hands of the small businesses who need it,” said Isabella Guzman, SBA administrator.
From May 2020 to February of this year, the Department of Justice says it has announced charges in nearly 150 fraud cases from SBA programs.