SBA OIG Report 21-16: Independent Auditors’ Report on SBA’s Compliance with Payment Integrity


This report presents the results of the required audit of the Small Business Administration’s (SBA’s) compliance with the Payment Integrity Information Act of 2019. We contracted with the independent certified public accounting firm KPMG LLP to conduct a performance audit, as required by the Act. You may review this report by CLICKING HERE

The objectives of the engagement were to review the payment integrity section of SBA’s Fiscal Year 2020 Agency Financial Report to determine whether the agency was in compliance with the Act. KPMG also evaluated the agency’s accuracy and completeness of reporting and performance in preventing and reducing improper payments.

The independent auditors’ report presents KPMG’s findings on the agency’s improper payment reporting required under the Act. KPMG reported that SBA is compliant with four of the six reporting requirements in the Act. However, SBA is not compliant with the Act because the Disaster Direct Loan Program reported an improper payments rate that exceeded the 10 percent threshold for compliance and did not demonstrate improvements as evidenced by not meeting its planned FY 2020 improper payments target reduction.

In addition, KPMG found the agency needs to improve the completeness and accuracy of improper payment reporting. The agency also needs to improve controls to prevent and reduce improper payments.