Audit Evaluation Report 14-08: Improvement is Needed to Ensure Effective Quality Control at Loan Operation Centers

On January 17, 2014, the OIG issued Evaluation Report 14-08; Improvement is Needed to Ensure Effective Quality Control at Loan Operation Centers.  The evaluation was designed to determine the status of the Quality Control Program and whether all elements of the program were being completed.

The OIG determined that while the SBA had made significant progress in implementing a quality control program for its loan centers, quality control activities were not being performed as required.  The OIG determined that Centers omitted required quality control reviews of significant functions.  Additionally, the OIG determined that the SBA discontinued regularly scheduled quality reviews at the National Guaranty Purchase Center during FY 2012 to focus on reviews required by the Improper Payments Elimination and Recovery Act (IPERA) of 2010.  Further, the OIG determined that corrective actions on deficiencies identified by the Center quality control teams were not appropriately tracked until resolution, as required.  Finally, the OIG determined that the SBA’s quality assurance program, responsible for ensuring that quality control activities at loan operation centers are working as intended, had not been established.

The OIG recommended three actions that will help strengthen the SBA’s quality control and assurance activities at its loan operation centers.  The Agency generally agreed with the OIG’s findings and  recommendations. The Agency has recently taken steps to address long-standing deficiencies within the existing quality control program.