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Small Business: Losses on Individual SBA Loan Programs Are Not Fully Disclosed

RCED-92-90 Published: Apr 17, 1992. Publicly Released: May 19, 1992.
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Highlights

Pursuant to a congressional request, GAO: (1) provided information on how the Small Business Administration (SBA) accounts for acquired collateral in reporting 7(a) Loan Program losses; and (2) reviewed whether SBA assigns proper value to collateral from defaulted loans when making acquisition decisions.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Small Business Administration To fully disclose individual loan program losses to Congress and others, the Administrator, SBA, should direct the Comptroller, SBA, to include the losses or gains from the sale of collateral in the annual loss study.
Closed – Implemented
The SBA Office of the Comptroller has modified its annual loss study report based on the GAO report to include the losses or gains from the sale of acquired collateral and all expenses incurred from the management and sale of this collateral.
Small Business Administration To increase compliance with SBA procedures for determining bid amounts and assigning collateral liquidation values, the Administrator, SBA, should ensure that all SBA liquidation personnel receive formal training in the valuation of collateral and SBA operating procedures.
Closed – Not Implemented
Because of SBA's reduced budget, the Office of Financial Assistance's requests in FY 1993 and FY 1994 for funds to conduct training for SBA liquidation personnel were approved by the SBA budget office and were not included in the SBA budgets sent to OMB.

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Topics

Business development loansEducationFinancial managementGovernment guaranteed loansLoan accounting systemsLoan defaultsReporting requirementsSmall business assistanceSmall business loansForeclosures