U.S. Small Business Administration announces increased efforts to aggressively crack down on bad actors and prevent program fraud


Credit: FCA

A newly appointed special counsel will oversee the enhanced strategies alongside a dedicated leadership council, building on the anti-fraud measures previously deployed by the SBA

April 3, 2022 – WASHINGTON – Last Friday, Administrator Isabella Casillas Guzmanhead of the US Small Business Administration (SBA) and the voice of America’s 32.5 million small businesses in President Biden’s Cabinet, announced a multifaceted expansion of efforts to identify and support the SBA Inspector General’s recovery of fraudulently obtained COVID economic relief funds and to prevent potential future theft of taxpayers’ money.

Recognizing that managing the risk of fraud in agency programs and operations is integral to the responsible management of taxpayer resources and the effective delivery of services to the American public, the SBA’s efforts will encompass a multi-tiered approach. components that builds on the current activities that the agency has undertaken to limit fraud. The SBA’s work within the Biden-Harris administration to improve controls for fraud in pandemic programs has been recognized by federal accountability agencies and watchdogs. These new efforts will expand that work as the SBA continues to take steps to ensure the integrity of its programs.

The main measures announced today are as follows:

  • The appointment of Peggy Delinois Hamilton to a new position as SBA Special Advisor for Enterprise Risks advising Administrator Guzman on Agency-wide fraud and risk management activities.
  • The creation of the SBA Fraud Risk Management Board (FRMB) provide anti-fraud monitoring and coordination.
  • In line with new efforts to hold bad actors to account for their fraudulent acts, the SBA fully supports the work of the Interagency COVID-19 Enforcement Task Force and DOJ Chief Pandemic Attorney and Director of COVID-19 Fraud Enforcement. The SBA believes that these new initiatives can improve the Agency’s fraud risk framework and further strengthen its fraud risk mitigation efforts.

“Throughout the first year of the Biden-Harris administration, the SBA has taken significant steps to close the door on fraud, waste and abuse and ensure that billions of dollars in publicly funded COVID relief taxpayers reach small business owners,” said SBA Administrator Guzman. “The steps we’re announcing today build on that work under the able oversight of Peggy Delinois Hamilton, as the SBA’s new Special Advisor for Enterprise Risk, and the new Fraud Risk Management Board. , in coordination with the SBA’s Office of the Inspector General and the Department of Justice’s Chief Pandemic Attorney. Together, we will hold fraudsters accountable and shut down future avenues of fraud.”

Consistent with the Biden-Harris Administration and Administrator Guzman’s emphasis on aggressively rooting out scams targeting government programs, these efforts also reflect Administrator Guzman’s top priority to increase fairness among programs and level the playing field for all entrepreneurs by ensuring eligible small business owners have full access to the capital and resources needed to start and grow their businesses.

Peggy Delinois Hamilton as Special Advisor for Enterprise Risk in the Administrator’s Office

Administrator Guzman appointed Peggy Delinois Hamilton as the SBA’s special advisor for enterprise risk in the administrator’s office. In this role, she will advise the Administrator on enterprise-wide risk management activities and directly support the Administrator in developing dynamic risk mitigation strategies facing the Agency, focusing on potential exposure to fraud as a top priority, as well as developing plans to reduce risk to SBA operations. With her extensive and unique banking regulatory experience and in-depth knowledge of agency priorities, she will provide strategic insight into potential enterprise-wide risks that have a clear impact on key agency programs. Peggy has served as general counsel for the SBA since February 2021, and another senior SBA official will assume those roles on an interim basis.

SBA Fraud Risk Management Board

The Fraud Risk Management Board (FRMB) was established to serve as the designated anti-fraud entity responsible for overseeing and coordinating the SBA’s fraud risk prevention, detection, and response activities. The FRMB is made up of experienced agency executives across the SBA business. They will report to the Enterprise Risk Management Board (ERM Board) and, through the ERM Board, to the Trustee. In coordination with the oversight community, the FRMB will take additional steps to assess and address agency-wide fraud risk.

SBA’s Ongoing Anti-Fraud Efforts and Improvements

The SBA has taken concrete steps to control and mitigate the risk of fraud in its COVID-19 relief programs by working in tandem with other federal government agencies and using a whole-of-government approach to reduce risk.

In addition, the SBA Fraud Risk Management Framework supports information sharing between SBA programs. As flags and alerts are placed on businesses and business owners, fraud indicators can be applied to various SBA programs, using a comprehensive SBA approach to prevent, detect and respond to fraud risks.

About the United States Small Business Administration

The United States Small Business Administration is making the American dream of business ownership a reality. As the single, go-to resource and voice for small businesses backed by the force of the federal government, the SBA gives entrepreneurs and small business owners the resources and support they need to start and grow their businesses. It provides services to people through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
Source: SBA


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