Federal investigators from the Government Accountability Office have released reports indicating that millions of dollars intended for small businesses were misallocated due to a weak application process in a SBA program.
GAO investigators claim the SBA’s Historically Underutilized Business Zone (HUBZone) program, intended to boost small businesses in economically depressed areas with federal contracts, allowed wealthy, unqualified businesses to commit fraud and abuse the program.
GAO’s six-month investigation into HUBZone, created in 1997, reveals that SBA rarely makes site visits and doesn’t verify facts on applications it receives. According to GAO, it was able to obtain HUBZone certification for four false business firms it created to test the soundness of the application process.
The report states that since 2006, federal agencies gave more than $105 million to these firms that were acting as primary contractors on federal contracts.
Photo by SBA.
Fraud Found In SBA Contract Program
July 24, 2008 by Rich | 1 Comment
In Government, News, Small Biz
cassy on July 25th, 2008 at 6:14 am
This is a big challenge to Mr. Sandy Baruah, the new appointed chief of SBA. This is the time to prove his ability even if he has little experience in business.