Management Advisory Report 6-34: Policies and Procedures for the SBAExpress and CommunityExpress Loan Programs
Date Issued: Friday, September 29, 2006
Report Number: 6-34

On September 29, 2006, the OIG issued Management Advisory Report 6-34, Policies and Procedures for the SBAExpress and CommunityExpress Loan Programs. While not an audit, the OIG reviewed policies and procedures for the SBAExpress and CommunityExpress Programs, and issued 16 recommendations related to five issues of concern, specifically:

(1) Although the SBAExpress Program has been in existence for over 11 years and was made permanent in permanent in 2004 by Congress, SBA has not issued any regulations to govern the Program.

(2) The Agency's Guide for the Program contains credit requirements for lenders that may conflict with the Small Business Act, and contains provisions that conflict with SBA regulations.

(3) The criteria for lenders seeking admission to the Program in the Guide may not provide SBA with sufficient information to identify whether the applicant lender presents an undue risk to the Agency, and appears to impose more stringent criteria upon ]enders who have previously participated in SBA loan guarantee programs than for lenders with no SBA program experience.

(4) Certain provisions in the Agency's Guide are ambiguous, or conflict with other agency policies, and do not provide meaningful guidance to lenders or guidance that SBA could rely upon to use enforcement to correct lender noncompliance.

(5) The Agency is relying on a Guide for the CommunityExpress Program that has never officially been cleared or issued by SBA, contrary to agency procedures.