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Chairman Van Duyne: "Office of Inspector General Reports to Congress on Investigations of SBA Programs"
WASHINGTON, D.C. – Today, the House Committee on Small Business Subcommittee on Oversight, Investigations, and Regulations is holding a subcommittee hearing titled “Office of Inspector General Reports to Congress on Investigations of SBA Programs.”
Subcommittee Chairman Beth Van Duyne’s opening statement as prepared for delivery:
Good morning and welcome to today’s hearing which will focus on the Office of Inspector General’s investigations of Small Business Administration programs.
First, I want to thank our witness, Inspector General Ware, for joining us today. I hope this is the first of several productive hearings we will have with you this Congress, and I appreciate you speaking with us today.
This hearing could not be coming at a more important time. I have heard from countless small businesses in North Texas who have faced difficulties in dealing with the SBA. The waste and mismanagement we have seen from the agency is a complete disservice to our job creators and their employees.
Some of the most egregious examples of SBA mismanagement came in the form of pandemic-related funds and programs. As the SBA disbursed an unprecedented amount of money, they relaxed internal controls and failed to be a responsible steward of taxpayer dollars.
While the SBA was overwhelmed with an increased workload, they left the door wide open for criminals to abuse pandemic relief programs. Who ultimately pays the price? Hard-working American taxpayers. The SBA’s disorganized management structure and a lack of basic guardrails to prevent fraud led to wasted taxpayer dollars.
The OIG identified nearly 71,000 potentially fraudulent PPP loans, totaling more than $4.6 billion, and that may only be the tip of the iceberg. In the Economic Injury Disaster Loan program alone, the Office of Inspector General found $78 billion in loans and grants that were potentially fraudulently obtained – tens of billions of dollars of apparent fraud from just one program.
Against Inspector General Ware’s advice, the SBA ended collection on and forgave all PPP loans with an outstanding balance of $100,000 or less. This sets a horrible precedent of allowing fraudsters to avoid facing repercussions.
While billions in pandemic relief funds were misused, the SBA neglected to implement simple fraud mitigation measures until after the first round of PPP loans were approved. We could have prevented much of this fraud, and still can for future programs, but the SBA has ignored proposed reforms.
Right now, our nation’s small businesses are facing run-away inflation, rising interest rates at the fastest pace since the 1980s, and a labor shortage. This committee is prioritizing the needs of our small businesses and their employees. We stand with them.
I hope this hearing can help gauge how Congress can take steps to improve the integrity, accountability, and performance of the SBA. Inspector General Ware has done a commendable job of shining a light on waste, fraud, and abuse within the SBA. I am hopeful that this hearing will help our Committee better understand how we can help our job creators get the support they need and deserve from the SBA.
With that I will yield to our distinguished Ranking Member from Maryland, Mr. Mfume.
Subcommittee Chairman Beth Van Duyne’s opening statement as prepared for delivery:
Good morning and welcome to today’s hearing which will focus on the Office of Inspector General’s investigations of Small Business Administration programs.
First, I want to thank our witness, Inspector General Ware, for joining us today. I hope this is the first of several productive hearings we will have with you this Congress, and I appreciate you speaking with us today.
This hearing could not be coming at a more important time. I have heard from countless small businesses in North Texas who have faced difficulties in dealing with the SBA. The waste and mismanagement we have seen from the agency is a complete disservice to our job creators and their employees.
Some of the most egregious examples of SBA mismanagement came in the form of pandemic-related funds and programs. As the SBA disbursed an unprecedented amount of money, they relaxed internal controls and failed to be a responsible steward of taxpayer dollars.
While the SBA was overwhelmed with an increased workload, they left the door wide open for criminals to abuse pandemic relief programs. Who ultimately pays the price? Hard-working American taxpayers. The SBA’s disorganized management structure and a lack of basic guardrails to prevent fraud led to wasted taxpayer dollars.
The OIG identified nearly 71,000 potentially fraudulent PPP loans, totaling more than $4.6 billion, and that may only be the tip of the iceberg. In the Economic Injury Disaster Loan program alone, the Office of Inspector General found $78 billion in loans and grants that were potentially fraudulently obtained – tens of billions of dollars of apparent fraud from just one program.
Against Inspector General Ware’s advice, the SBA ended collection on and forgave all PPP loans with an outstanding balance of $100,000 or less. This sets a horrible precedent of allowing fraudsters to avoid facing repercussions.
While billions in pandemic relief funds were misused, the SBA neglected to implement simple fraud mitigation measures until after the first round of PPP loans were approved. We could have prevented much of this fraud, and still can for future programs, but the SBA has ignored proposed reforms.
Right now, our nation’s small businesses are facing run-away inflation, rising interest rates at the fastest pace since the 1980s, and a labor shortage. This committee is prioritizing the needs of our small businesses and their employees. We stand with them.
I hope this hearing can help gauge how Congress can take steps to improve the integrity, accountability, and performance of the SBA. Inspector General Ware has done a commendable job of shining a light on waste, fraud, and abuse within the SBA. I am hopeful that this hearing will help our Committee better understand how we can help our job creators get the support they need and deserve from the SBA.
With that I will yield to our distinguished Ranking Member from Maryland, Mr. Mfume.
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