U.S. Pandemic Program Mistakenly Paid $692,000,000

(TheFreedomFlag.com)- The Small Business Administration made a not-so-small mistake — to the tune of $692 million.
On Monday, the Office of the Inspector General at the SBA said lenders made duplicate loan disbursements as part of the Paycheck Protection Program.
Between April 3 and August 19, a total of 4,260 of these borrowers received double payments Of them, 1,571 had the same business name and address, while 2,689 had the same tax ID number.
There were 8,731 total loans involved in the fiasco, which totaled roughly $692 million.
In the Inspector General’s report that was released this week, the SBA said it would resolve these duplications by recovering any improper payments they made. They would also prevent loan forgiveness on any of the duplicate loans.
In other words, businesses who received these duplicate loans will have to return the money to the SBA — if they can.
The report also said the SBA identified the issues last year that caused these duplicate loans to be processed. The agency also said it turned off the controls for the electronic application system for the PPP loans, relying instead on reviewing loans so as to avoid the duplicates.
The report stated:
“Establishing strong controls to prevent improper or duplicate disbursements from occurring during initial loan processing is more effective than attempting to identify and resolve improper disbursements in the loan review phase. SBA’s efforts should focus on safeguarding funds up front, as it is more prudent and effective to prevent a loan from occurring than attempting to recover funds after the loan has been disbursed.”
The reason why the OIG was reviewing the vulnerabilities in the loan-processing system at the SBA was because the House Select Subcommittee on the Coronavirus Crisis requested it to occur.
The PPP program has been under fire ever since it was passed last March. Some large companies that weren’t supposed to qualify for the loan ended up getting a lot of money from it.
A Business Insider report highlighted the fact that Shake Shack got a $10 million PPP loan, even though the program was intended to help only those companies with 500 or fewer employees. Ultimately, Shake Shack returned the money they got. Other companies did the same thing.
Despite some of these issues, the PPP has remained extremely popular as a lifesaver for businesses throughout the country. In President Joe Biden’s $1.9 trillion economic relief package, another $7.25 billion was set aside to fund the PPP again.
Last Thursday, the House Small Business Committee introduced a bill that would extend the program through May 31. It was originally set to expire on March 31.
In a statement, the chair of that committee, Representative Nydia Velazquez, said:
“The demand for PPP loans right now is a testament to the program’s effectiveness and the lingering impacts of this pandemic. That’s why we cannot cut off aid now and this short-term extension is so important.”
They better hope that the SBA gets its act together quickly, though, so more multi-million-dollar mistakes don’t happen.