WASHINGTON — Sen. Olympia Snowe called on the Small Business Administration to finalize a plan to fix processing errors that led to millions of dollars in overpayments on loan guarantees in 2007.
An inspector general's report estimated that 27% of payments on loan guarantees in 2007 were improper, totaling $234 million in overpayments.
"We've got to get a standardized process in place …without delay," Snowe said Thursday at a Senate Small Business Committee hearing on waste and fraud in SBA programs.
Administrator Karen Mills testified that SBA is working with the IG's office on conducting a joint review to determine the exact number of overpayments in 2007. But SBA Inspector General Peggy Gustafson said the delays could impair their ability to reach an agreement on possible overpayments in fiscal year 2010.
Snowe and Sen. Chuck Grassley, R-Iowa, sent a letter to the Justice Department Wednesday asking why 17 cases of fraud and abuse in SBA programs — involving theft, embezzlement, conspiracy, counterfeiting, corruption and bank fraud — referred by the inspector general have not yet been prosecuted.
Asked about how the Dodd-Frank Act is affecting small businesses access to capital, Mills said small businesses are more concerned about overzealous bank regulators.
"We are working very hard with third-party regulators to …make sure that they're giving clear direction to their banks so that small businesses who have previously been credit-worthy are considered appropriately," Mills said.
