KPMG Management Letter Communicating Matters Relative to SBA’s Fiscal Year 2025 Financial Statements Audit

On January 21, 2026, we issued the financial statements audit report (Report 26-03) performed by the independent certified public accounting firm KPMG LLP. The auditors issued a disclaimer of opinion on the consolidated balance sheet as of September 30, 2025. During that audit, KPMG identified and reported on four material weaknesses and one significant deficiency.

When conducting an audit of an agency’s financial statements, auditors may identify certain other matters involving internal controls that do not rise to the level of a material weakness or significant deficiency and are not required to be reported in the independent auditors’ report. Instead, those matters are communicated in a management letter.

This memorandum has been prepared to transmit a management letter prepared by KPMG, dated February 20, 2026, to report internal control issues identified during the 2025 financial statement audit, that were not included in the final financial statement audit report. The attached management letter entitled Controls Related to the Reporting of Outstanding Guaranty Loans details the following issues identified by KPMG:

• Management did not properly categorize the 1 month reporting lag of the guaranty loan balances as a non-generally accepted accounting principles policy.
• Management did not perform a timely review of the non-generally accepted accounting principles policy related to the untimely reporting of the guaranty loan balances and determine its impact on the financial statements and related notes.

The auditors made two recommendations based on these findings that management agreed to implement to improve internal controls. We consider the recommendations issued in this letter as open audit recommendations. In accordance with our audit follow-up process, we will monitor management’s implementation of the corrective actions.