Paycheck Protection Program (PPP) Loan Approvals

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Program level Payment Integrity results

Sponsoring agency: Small Business Administration

View on Federal Program Inventory

PROGRAM METRICS

$685,179 M

in FY 2022 outlays, with a

95.8%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2022 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2020 - 03/2022


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-3.0

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $0 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $12,529.33 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $12,529.33 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $0 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$0 M

Unknown Payment Details

For instances in which the SBA was unable to determine whether a payment was proper or improper, the SBA categorized these payments as “Unknown”. SBA classified the loan amount as an "Unknown payment, if SBA were waiting for information or documentation from a borrower or lender in order to make a determination about borrower eligibility or loan eligibility amount.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $16,497.71 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation

Evaluation of corrective actions

Overpayments are the result of the borrower receiving a PPP loan in an amount that (1) exceeds the borrower’s eligibility, (2) that cannot supported through documentation, or (3) that was not used for purposes permitted by statute or guidance. In its review of the loan, if SBA determines that the loan is not eligible for forgiveness (in whole or in part), the borrower must begin paying principal and interest.

Future payment integrity outlook

Paycheck Protection Program (PPP) Loan Approvals has established a baseline.

Improper payment rates for the Paycheck Protection Program loans were reported for the first time in FY2022. The program ended on May 31, 2021. No loans were awarded after the program end date, therefore, SBA did not establish a program target reduction rate for FY2023.

The program's current year improper payment and unknown payment rate of 4.24 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

This is the first year the program is reporting improper payment data. As such, there is insufficient historical data to establish a tolerable rate.

The agency has what is needed with respect to internal controls, human capital and information system and other infrastructure to reduce improper payments and unknown payments to the tolerable rate.

No resources have requested in the most recent budget submission of the agency to establish and maintain the internal controls.

Additional programmatic information

In accordance with program regulations, when a PPP Lender received a forgiveness application from a borrower, the Lender reviewed the application and submitted a forgiveness decision to SBA. If the lender determined that the borrower was entitled to forgiveness of some or all of the amount applied for, the lender requested payment from SBA at the time the lender issued its decision to SBA. SBA, subject to any SBA review of the borrower's loan(s) or loan application(s), remitted the appropriate forgiveness amount to the lender, plus any interest accrued through the date of payment.

SBA reviewed the forgiveness applications from lenders. SBA compared the loan amount disbursed to the amount of loan forgiveness requested. In general, any loan amounts not forgiven were determined to be improper.

SBA reviewed borrower eligibility, (including whether the borrower had been debarred; whether the borrower had defaulted on federal debt within the last 7 years; whether the borrower had been convicted of a felony involving fraud, bribery, or embezzlement; whether the borrower was incarcerated; and, whether the borrower was a U.S. citizen) and reviewed documentation to determine whether the borrower’s business was in operation. Borrowers that were not eligible based on these eligibility criteria were denied forgiveness. The full amount of the loan disbursed for these forgiveness denials was determined to be improper.

SBA also reviewed documentation to determine whether borrowers had eligible expenses during the covered period, and, if so, in what amount. SBA determined that borrowers with no eligible expenses during the covered period had received the loan improperly, and the full amount of the loan was determined to be improper. If a borrower had eligible expenses that did not equal the amount of the loan disbursed, only that portion of the loan forgiven was determined to be proper. The remaining unforgiven portion was determined to be improper.

Improper payment rates for the Paycheck Protection Program loans were reported for the first time in FY2022. The program ended on May 31, 2021. No loans were awarded after the program end date.