WASHINGTON (Sputnik) - The Small Business Administration (SBA) distributed $910 billion to small enterprises hurt by the coronavirus pandemic measures but reduced oversight in a bid to speed payments left the program vulnerable to fraud, the General Accountability Office (GAO) said on Wednesday.
"Although SBA has taken some steps to mitigate fraud risks to PPP [Paycheck Production Program] and EIDL [Economic Injury Disaster Loans], such as conducting PPP loan reviews and implementing new EIDL controls, the agency has not yet conducted a formal fraud risk assessment for either program," GAO said in a report.
So far, the SBA made 17 million loans totaling $910 million through the two relief programs, the report said.
As indicators of fraud, the report cited 5,000 advances totaling about $26 million and the approval of at least 3,000 loans totaling about $156 million to potentially ineligible businesses under the EIDL program, the report also said.
Banks filed more than 40,000 suspicious activity reports for the two programs, the report added.
In addition, the Justice Department announced more than 100 fraud-related cases associated with PPP loans and 30 fraud-related cases associated with EIDL loans as of February 2021, according to the report.