Peggy E. (Peg) Gustafson was sworn in as the Inspector General of the U.S. Small Business Administration on October 2, 2009. Ms. Gustafson previously served as General Counsel to Senator Claire...
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Report 12-11R: High-Dollar Early-Defaulted Loans Require an Increased Degree of Scrutiny and Improved Quality Control at the National Guaranty Purchase Center
This is the final report in a series of memorandums related to our audit of twenty-five purchased 7(a) Recovery Act loans. Overall, material deficiencies were identified in 14 of the 25 early-defaulted loans selected for audit. These deficiencies resulted in questioned costs or recoverable guaranty payments totaling approximately $10.7 million. The audit found that the National Guaranty Purchase Center (NGPC) either made a purchase error or did not identify the deficiencies during its guaranty purchase reviews on six of the nine loans it reviewed. This resulted in improper payments totaling approximately $3.3 million. Due to the high number of deficiencies identified and the resulting improper payments, we recommended that the SBA establish a specialized early-default purchase review unit at the NGPC.