[StBernard] GAO Report Confirms Bipartisan Call for Accountability in Disaster Loan Program

[Westley Annis]

GAO Report Confirms Bipartisan Call for Accountability in Disaster Loan
Program

 

WASHINGTON - A Government Accountability Office (GAO) report to be released
today reveals the need for legislation introduced today by Senators John
Kerry (D-Mass.), Olympia J. Snowe (R-Maine), Mary Landrieu (D-La.), and
David Vitter (R-La.) to require the federal government to provide a detailed
plan for implementing the Disaster Loan Program and regular reports on the
solvency of the program to Congress. The GAO report recommends the Small
Business Administration (SBA) establish timeframes for completing key
elements of its disaster plan and assess whether the use of disaster
simulations could improve future responses to disasters. Both
recommendations are incorporated in the bipartisan legislation. 

 

"This GAO report makes clear that more information and better planning is
needed to ensure adequate services and funding will always be available for
those in need after a disaster, and that's what our bipartisan legislation
does," said Kerry, Chairman of the Committee on Small Business and
Entrepreneurship. "We're working to prevent a 'sky is falling' scenario that
results in multiple last-minute funding requests. The uncertainty that
inherently comes with a disaster shouldn't translate into uncertainty over
money for loans, or even whether there's a staffer to process your
application or return your phone call."

 

Over the last year, the program has been close to shutting down three times
due to insufficient funds - most recently this week, though Congress is
expected to address the shortfall by the 15th.  Twice last February the
program needed emergency funding to ensure that victims of Hurricanes
Katrina and Rita would receive critical disaster aid. 

 

"With the SBA at the forefront of disaster relief efforts, it is essential
that we find ways to ensure that this country's 25 million small businesses
have a resource they can depend on when disaster strikes," Snowe said. "We
learned all too well after the 2005 Gulf Coast hurricanes, it is critical
for government programs to run smoothly and efficiently when called upon to
aide disaster victims.  We can all agree that that there were significant
deficiencies with the SBA's disaster response effort, and I believe that we
can all agree that this vital legislation will support the SBA in its
continuing efforts to ensure those deficiencies are eliminated."

 

"An important lesson of hurricanes Katrina and Rita is that we must reform,
streamline and strengthen the SBA with better tools to prepare for the next
disaster," Sen. Landrieu said.  "This bill will provide vital Congressional
oversight and ensure that the SBA has a flexible, fast-acting disaster
response plan for any disaster, be it natural or manmade. I look forward to
working with my colleagues to secure quick passage of this important
legislation."

 

"If we are going to meet our local contracting goals, we need the proper
information and authority to prevent backlog and delayed funding," said
Vitter.  "This legislation reflects the GAO report and will provide greater
stability and peace of mind to our small businesses recovering from natural
disasters like hurricanes Katrina and Rita."

 

The Small Business Disaster Loan Reporting Act of 2007 requires the Small
Business Administration (SBA) to:

 

*        Update its Hurricane Response Plan by May 1, 2007, detailing how
the Administration will respond to major disasters in the future, including
the use and training of staff, coordination with other agencies, and models
for response based on the scale of the disaster;

 

*        Submit monthly accounting reports to Congress outlining disaster
loan activity for all major disasters during the previous month, including
loan volumes, amount spent on loans and administrative costs, and an
estimate of how long funding will be available;

 

*        Report daily to Congress on the loan activity for each individual
disaster declared by the President, including the number of applications
received and their status as well as the dollar amount of the applications
approved and disbursed.

 

*        Provide Congress with a notice of the need for supplemental
funding;

 

*        Compile a report on how the processing of disaster loans can be
improved; and

 

*        Submit a report on federal contracts awarded as a result of a major
disaster every six months from the date it was declared, including the total
number of contracts awarded and the number of contracts awarded to small
businesses, women and minority-owned businesses, and local businesses.

 

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