WASHINGTON–Fraud or improper payments accounted for more than $90 billion of the government’s emergency pandemic aid for the unemployed and small businesses, according to a report from a federal watchdog.
Almost $87 billion will have been paid in improper or fraudulent supplemental unemployment insurance claims by the time the program expires in September, according to the report from the Pandemic Response Accountability Committee. That’s an increase from $63 billion in fraudulent payments reported in February, according to data from the Department of Labor’s Office of Inspector General, noted Bloomberg.
In addition, the report further found the Small Business Administration approved 57,500 Paycheck Protection Program loans worth $3.6 billion to businesses who had been flagged by the government as entities that shouldn’t receive payments.
Moreover, the report also said that the SBA Inspector General found “no evidence” that businesses in under-served and vulnerable areas received the forgivable loans, a key priority that Democrats included in the March stimulus legislation, Bloomberg reported.
Distribution Struggles
“The report underscores just how much the government has struggled to distribute roughly $5 trillion of coronavirus aid to the proper recipients, even after some programs have been operating for more than a year over the course of two presidential administrations,” Bloomberg stated in its analysis.
The Internal Revenue Service also sent approximately 2.2 million stimulus payments totaling nearly $3.5 billion to deceased individuals, a glitch that was fixed in the system for subsequent rounds of payments, the report said. However, only about total of 59,500 payments totaling more than $72 million, roughly 2%, have been voluntarily returned as of Oct. 1, 2020, Bloomberg stated.
PPP Fraud Report
As CUToday.info reported earlier, an analysis by researchers at the University of Texas found approximately 1.8 million of the Paycheck Protection Program’s 11.8 million loans — more than 15% and totaling $76 billion–had at least one indication of potential fraud. That report suggested fintechs were significant players in those questionable applications, a finding fintech companies have pushed back against.