COVID-19: Data Sharing Project Finds Billions Paid to Same Likely Fraudsters Under Both the Unemployment Insurance and Economic Injury Disaster Loan Programs

The Office of Inspector General (OIG) is issuing this inspection report to determine whether data sharing between the Employment and Training Administration and the U.S. Small Business Administration (SBA) could mitigate the risk of fraudulent unemployment insurance benefit payments and SBA disaster program disbursements.

In 2020, soon after Congress expanded the Unemployment Insurance and Economic Injury Disaster Loan Programs in response to the adverse economic effects caused by the Coronavirus Disease 2019 pandemic, the U.S. Department of Labor OIG and SBA OIG respectively began reporting on heightened risks of fraud and found similar fraud indicators. The two OIGs found that billions of dollars were paid to the same likely fraudsters under both programs. The DOL and SBA OIGs identified this issue through a data use agreement and subsequent data sharing and matching project, highlighting an opportunity to collaborate on data matching to mitigate fraud.

SBA OIG made three recommendations – two to facilitate improved fraud controls via collaboration and one to reevaluate eligibility. SBA agreed with the three recommendations, and the planned actions will resolve those recommendations.