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The Small Business Administration’s Shuttered Venue Operators grant program made $544 million of improper payments during the Covid-19 pandemic, but the SBA has not even tried to recover most of the funds, a new audit from the agency’s inspector general found.
The Shuttered Venue Operators Grant program gave $16.3 billion in grants to movie theaters, concert halls and other performance venues that had to close during the pandemic.
The SBA realized in 2024 that $544 million was paid to 579 businesses that may have been ineligible for the grants or did not fill out their paperwork properly. Federal law requires agencies to “promptly” send demand letters asking businesses to return the improper payments, but the SBA has only sent one demand letter.
SBA officials wrote a policy for sending demand letters in August 2023, but the policy had still not been approved as of November 2024. Some officials wanted the SBA’s Office of Hearing and Appeals to mediate disputes over improper payments, but the Office claims it does not have the authority to do so. --->READ MORE HERE
Sarah Torres was counting on two government checks to keep her family-owned bakery afloat when an unfortunate mishap turned her business upside down.
After depositing two Employee Retention Credit (ERC) checks from the U.S. Treasury worth $212,853, Torres discovered that not only were the checks placed on hold, but her entire business account was frozen.
“It was just a nightmare,” Torres told ABC7 News. “I was crying to them, ‘please, this is a business account… I have 20 employees that I need to pay!’”
Torres eventually learned that the issue was a clerical error involving her business’s Employer Identification Number (EIN) that had been changed last year but apparently wasn’t updated with the IRS.
For more than a month, Torres struggled to access her business funds — which threatened the very existence of A Sweet Affair Bakery, a staple for those with a sweet tooth in Walnut Creek, California for more than four decades.
‘Had to take out money from my kid’s college account’
Congress created the ERC program in 2020 to help U.S. businesses keep employees on payroll during and after the COVID-19 pandemic. For Torres, these credits represented a vital financial lifeline.
“It’s money we’ve been waiting for years for, and we desperately need,” said Torres.
Unlike many small businesses during the pandemic, A Sweet Affair Bakery didn’t receive any federal Paycheck Protection Program loans, making these retention credits all the more critical to her operation. But with her business account frozen, Torres was forced to take drastic measures. --->READ MORE HEREFollow links below to relevant/related stories and resources:
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