The occupational safety and health loan program as administered by the Small Business Administration (SBA) in cooperation with the Department of Labor's Occupational Safety and Health Administration (OSHA) is to help small businesses comply with mandated occupational safety and health standards. A review of the loan program showed that few loans have been made.

No assurance exists that loans are being made only to businesses that would suffer substantial economic injury without assistance or need the loans to comply with occupational safety and health standards. Controls are not adequate to ensure that workplace hazards are corrected. The occupational safety and health loan program is seldom used by small business. Neither SBA nor OSHA knows why. It has been suggested that more businesses do not request loans because of fear of an OSHA or state inspection or because of reluctance to prepare and submit engineering plans. SBA and OSHA need to do more to ensure that loans are needed to correct violations and that violations are actually corrected.

Status Legend:

Review Pending-GAO has not yet assessed implementation status.

Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.

Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.

Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.

• Review Pending
• Open
• Closed - implemented
• Closed - not implemented

Recommendation for Executive Action

Recommendation: The Administrator, SBA, should (1) establish criteria for determining whether an applicant would suffer substantial economic injury without a loan; (2) require that loan officers document the basis for their determination; and (3) in cooperation with OSHA, establish procedures for determining whether the loan amount requested is needed to correct violations of standards for followup after the corrective action is completed to ensure that the use of loan funds results in correcting the standards' violations.

Agency Affected:

Status: Closed

Comments: Please call 202/512-6100 for additional information.