Audit Briefing Report 13-11: The SBA’s Loan Management and Accounting System- Incremental Improvement Projects

Date Issued: 
Tuesday, March 19, 2013
Report Number: 

This report presents the results of the OIG's review of the Small Business Administration’s efforts to modernize its loan management system and migrate off the mainframe environment. Since 2004, a significant management challenge facing the SBA is the modernization of the loan accounting process. Specifically, this report addresses issues identified in the planning, management, and oversight of SBA’s ongoing migration efforts.

The OIG found that the SBA successfully migrated the data-entry of over 44% of its loan and lending transactions from mainframe data entry to web-based data entry.  This was the first step in fully migrating off SBA’s legacy mainframe and utilizing updated technology. During the review, the OIG also found that the:

  • SBA did not have an incremental improvement project to migrate its newly created COBOL code into production.
  • Root Cause Analysis Project was altered from its initially approved project.
  • User Interface Migration Project screens were not security tested and validated.
  • Quality Assurance and Independent Verification and Validations programs did not exist.

The OIG identified five findings that put the development of this project at risk for not meeting the needs and expectations of the SBA, the Office of Management and Budget (OMB), and Congress.  The OIG also issued six recommendations.