According to an analysis by the Small Business Administration (SBA)’s Office of the Inspector General, there were 4,260 borrowers who received duplicate loans sent out under the Paycheck Protection Program (PPP).
The 4,260 borrowers encompassed $692 million, involving over 8,731 PPP loans, the report stated.
The issue was discovered in May when the SBA Office of Capital Access notified the SBA Office of Inspector General that there had been numerous times when the processing for PPP loans didn’t detect the duplicates, according to the report. Occasionally, more than one loan number went to a borrower.
The report found the SBA “did not always have sufficient controls” to detect and prevent these duplicate loans and didn’t address the reasons for this as it continued through the end of the program in August. The SBA, according to the report, only focused on the duplicate loan numbers and not the disbursements.
The SBA said the error occurred from the one-time use of bulk loan processing, the report stated. That process was only used to address a backlog of PPP applications. Loan information was compared to applications already processed, and the script stopped working for 14 hours before the SBA detected it. The agency then did not go back and check for duplicates processed during that 14-hour period.
The PPP was renewed in late December as Congress put forward its second stimulus package, but small businesses have reported issues with the service, including hours-long phone waits as well as issues in getting loans due to typos, technology problems and anti-fraud glitches, along with inaccuracies in government paperwork.
Thousands of people were turned down because they accidentally registered as having criminal convictions.
The President Joe Biden administration, in an attempt to help alleviate stresses on the program, let companies with fewer than 20 employees apply first.
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