WASHINGTON: The US Small Business Administration's internal watchdog has launched an inquiry into a technical glitch that led many small businesses to receive duplicate loans through a high-profile federal coronavirus aid program.
A spokesman for the SBA Office of the Inspector General confirmed that the office has begun a review of the issue, which Reuters reported last month may have led to hundreds of millions of dollars in duplicate loans being approved under the US$660 billion Paycheck Protection Program .
The duplicate loan issue may have created"significant opportunities" for fraud and potentially wasted more than US$100 million in taxpayer dollars, Clyburn said in the June 23 letter addressed to SBA Inspector General Hannibal"Mike" Ware. He said it was"critical" to probe the issue as soon as possible.The SBA launched the program on Apr 3 to help keep workers at struggling businesses employed.
Lenders are still grappling with unwinding duplicate loans across several banks and retrieving the cash where those loans have been deposited, according to one person with direct knowledge of the matter. The government has said it will only guarantee one loan per borrower, which means lenders, rather than the taxpayer, are likely to be on the hook for the error.
Source: News Formal (newsformal.com)
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