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The U.S. Small Business Administration, Office of Inspector General (SBA OIG) is pleased to share its two most recently issued reports for your consideration: -
On August 27, 2014, the OIG issued Audit Report 14-16, Effectiveness and Timeliness of the Hurricane Sandy Disaster Loan Closing and Disbursement Processes. This report presents the results of our audit of Hurricane Sandy disaster loan closing and disbursement processes. The OIG reviewed these processes to determine whether all required closing documents were being obtained, all required closing steps were being performed prior to disbursement, and whether the SBA met its strategic goal of making initial disbursements within five days or less after receipt of executed closing documents. The OIG found that the SBA closed and disbursed Hurricane Sandy disaster loans in compliance with established procedures and performance standards. The OIG also determined that the SBA obtained all required closing documents during the closing process and all steps for each disbursement were performed as required. Additionally, the OIG determined that after receipt of executed closing documents from the borrowers, the SBA made initial disbursements within its strategic goal of five days after receipt of executed closing documents. The audit did not identify significant concerns regarding the disaster loan closing and disbursement processes. During the audit, the OIG identified opportunities for management consideration which may further reduce overall loan disbursement times. Specifically, we believe the SBA could significantly reduce overall loan closing and disbursement times if it obtained certain documents from borrowers earlier in the application process. -
On August 27, 2014, the OIG issued Evaluation Report 14-17, Evaluation of SBA's 2013 and 2014 Cash Gifts. This report presents the results of our review of SBA controls over the solicitation, acceptance, holding, and utilization of cash gifts. Based on our review, we determined that the SBA obtained proper approvals to solicit and accept gifts for the 2013 National Small Business Week. The donors were properly vetted through the SBA program offices to ensure no business relationships existed that would cause a conflict of interest. The SBA's Office of General Counsel confirmed that no conflict of interest existed between the SBA and those entities. We also determined the SBA adequately complied with the Act regarding the holding of $36,510 and utilization of $29,106 in cash gifts. The SBA recorded the cash donations in the Business Assistance Trust Fund and made the funds available to the SBA program offices for expenditure. We further determined that those funds were used to pay for valid expenses in accordance with the Act. However, the SBA did not employ sufficient controls to ensure the acceptance of cash gifts. More specifically, the Office of Strategic Alliances erroneously reported to the Office of Inspector General that a $10,000 cash gift was received from an organization. This occurred due to the lack of communication between respective SBA officials. As a result, cash gifts reported in the OIG Semiannual Report: Spring 2013 were overstated by $10,000. Also, the SBA did not timely close out its 2013 National Small Business Week cosponsored activity and accurately record and deposit the excess cosponsor funds that were gifted to the Agency. These issues occurred because the Office of Strategic Alliances did not provide adequate oversight, and did not correctly calculate excess cosponsored funds that should have been deposited in the Business Assistance Trust Fund. As a result, SBA personnel did not comply with SBA policies, and cash gifts deposited to the Business Assistance Trust Fund were understated by $300. The OIG recommended three actions directed to the Deputy General Counsel to improve controls over SBA's cash gifts authority and controls over the administration and close out of SBA's cosponsored activities. |
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