GAO: SBA sees spike in spending, workforce
- By FederalSoup Staff
- Jun 03, 2021
Over the past year, the Small Business Administration massively boosted spending—and staffing—to address several new and unprecedented agency priorities, as a lead in managing the economic fallout from the fast-moving coronavirus pandemic.
In fact, the overall funding increase came to approximately $3.4 billion, or a stunning seven times that of a typical recent year, according to a new report from the Government Accountability Office.
“The COVID-19 pandemic disrupted small businesses and generated an immediate need for emergency funding to keep businesses operating,” says the new GAO report, issued this week. “In response, Congress dramatically increased the amount of loans, grants, and other financial assistance available from SBA.”
“To help SBA manage the large volume of assistance, Congress provided the agency additional funds for administrative expenses,” the report adds. The GAO report focuses on these disbursements.
More than half of the funds had been spent by the end of January 2021, GAO reports—almost all of which went to cover additional hiring of personnel, overtime and benefits or contract work. The breakdown comes to three-quarters out the door to contractual services, and most of the rest to pay new, often nonpermanent hires. The latter included about 6,000 temporary SBA agency employees, most of them loan specialists.
In the face of the pandemic, SBA was tasked to handle massive surges in public demands for services, including the Economic Injury Disaster Loan (EIDL) program as well as the well-publicized Paycheck Protection Program (PPP).
GAO prepared the report in compliance with a provision passed last year by Congress “to report on SBA's use of supplemental appropriations provided in fiscal year 2020 for administrative expenses,” the report notes.