A Small Business Administration (SBA) emergency relief program, implemented during the onset of the pandemic, improperly paid nearly $4.5 billion to self-employed people, some of whom erroneously claimed they had additional workers.
In a report (pdf) released on Thursday, the internal watchdog at the federal agency responsible for managing COVID-19 emergency loans and grants to small business owners and nonprofits said that the $20 billion Economic Injury Disaster Loan (EIDL) program failed to filter out applications with “flawed or illogical information.”
Under the program, recipients were eligible for $1,000 per employee, with a $10,000 cap.
SBA Inspector General Hannibal Ware determined that 542,897 individuals who received at least $1,000 failed to provide an Employer Identification Number (EIN), and claimed more than one employee on their applications.