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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Audit Report 14-14: Improving Accuracy of Performance Reporting to Better Manage Disaster Loan Processing Time Expectations
This report presents the results of the OIG's audit of the Small Business Administration’s (SBA’s) disaster loan processing times. The OIG found that the SBA generally was unable to attain its disaster loan process time performance goals unless it included applications that were automatically declined or quickly rejected before loss verification. These types of applications typically took two or three days to process, whereas full processing took significantly longer. The SBA’s reported average processing time – as published in its Congressional Budget Justification and Annual Performance Reports – included the processing time for these two types of declinations. Because of the methodology it used to compute processing time for disaster loan applications, the SBA’s reported performance did not accurately communicate to eligible applicants and oversight officials how long it was likely to take for most applicants to receive a disaster loan. The OIG also found that processing time performance standards were generally not attainable beyond certain application volume levels.
The OIG recommended that the Agency report the processing time for automatically declined applications and pre-loss verification declined applications separately form applications that require more extensive processing, rather than continue averaging these processing times together. Additionally, the OIG recommended that the SBA establish disaster loan processing time goals based on actual average processing times, net of automatic declinations and quick rejections performed prior to loss verification. Further, the OIG recommended that the established goals also consider the full processing time for all applications with withdrawals that had reacceptances. Finally, the OIG recommended that the SBA establish processing time standards for different application volumes based on historical performance and include anticipated processing time standards for a range of possible application volumes in the annual Congressional Budget Justification and Annual Performance Report. The OIG’s written response to a request from the U.S. Senate Committee on Small Business and Entrepreneurship for additional application information related to Hurricane Sandy disaster loans is also attached.