The House Select Subcommittee on the Coronavirus Crisis found that over $1 billion PPP loans went to companies that received more than one.
According to the findings, the Select Subcommittee identified 10,856 loans in which the borrower received multiple PPP loans.
However, only 65 would be 'subject to additional scrutiny based on the Administration's stated plans to audit loans.
The PPP policies, which is part of the $2 trillion CARES Act, prohibits companies from receiving multiple loans.
Coronavirus Aid Fraud Findings
Congressional investigators found over 600 loans — totaling more than $96 million — went to companies excluded from doing business with the government.
Also, the committee found over 350 loans went to government contractors that the federal government had flagged for performance or integrity issues.
Select subcommittee staff compared the government's System for Award Management database against information companies used to obtain the loans.
After the analysis, over 11,000 borrowers had red flags, such as mismatched addresses.
The comparison also implicated $2.98 billion in PPP loans.
The report also stated that the SBA and Treasury approved hundreds of loan applications missing key identifying information.
More Work Needs to be Done
As part of a subcommittee hearing, Treasury Secretary Steven Mnuchin said PPP loans 'may have been diverted from small businesses truly in need to ineligible businesses or even to criminals.'
According to Select Subcommittee Chairman James Clyburn, the government should have done more to prevent fraud.
"Taxpayers should not have to choose between quickly getting aid to those who need it and wasting federal funds. And there are simple steps [the government] could have taken to improve oversight and reduce fraud."
Clyburn also directed the SBA and Treasury Department Inspectors General to review the administration's management of the PPP.
In a letter, he wrote:
"The Subcommittee's analysis shows that PPP helped millions of small businesses and non-profit organizations stay afloat during the coronavirus crisis."
"However, the lack of oversight and accountability from SBA and the Treasury may have led to billions of dollars diverted to fraud, waste, and abuse, rather than reaching small businesses truly in need."
Government watchdogs also said the report underscores the need for more sunlight in the loan process.
Kyle Herrig added:
"Trump's administration failed to design and implement a program that would help actual small businesses and their workers. Instead, it cut corners and kept the American people in the dark."
"In the end, the [SBA and Treasury] showered the wealthy and well-connected with our tax dollars, and fraudsters took advantage of the program's troubling lack of transparency."