Waste of the Day: No Effort to Claw Back Improper Covid Grants
Topline: The Small Business Administration’s Shuttered Venue Operators grant program made $544 million of improper payments during the Covid-19 pandemic, but the SBA has not even tried to recover most of the funds, a new audit from the agency’s inspector general found.
Key facts: The Shuttered Venue Operators Grant program gave $16.3 billion in grants to movie theaters, concert halls and other performance venues that had to close during the pandemic.
The SBA realized in 2024 that $544 million was paid to 579 businesses that may have been ineligible for the grants or did not fill out their paperwork properly. Federal law requires agencies to “promptly” send demand letters asking businesses to return the improper payments, but the SBA has only sent one demand letter.
SBA officials wrote a policy for sending demand letters in August 2023, but the policy had still not been approved as of November 2024. Some officials wanted the SBA’s Office of Hearing and Appeals to mediate disputes over improper payments, but the Office claims it does not have the authority to do so.
No demand letters can be mailed until the SBA figures out its policy. The longer it takes, “there is an increased risk that the government will not be able to collect improperly paid funds. The ability of an agency to collect delinquent debts generally decreases as debts get older,” according to the inspector general.
There were 220 grant recipients who voluntarily returned a total of $44 million without a demand letter.
The federal government lost $161.5 billion to improper payments in 2024.
Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com.
Summary: If a private citizen accidentally lost millions of dollars, they would make every possible effort to retrieve the money. SBA officials should be treating taxpayer funds with the same amount of care.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
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