$648M in PPP Loans Given to Likely Ineligible Nonprofits
$684 million of taxpayer money went to 179 non-profit organizations who likely were not eligible for Paycheck Protection Program refundable loans.
The Small Business Administration oversaw the more than $800 billion in PPP funds given to small businesses during the Covid-19 pandemic. Its Office of Inspector General issued a report last month that revealed 179 large nonprofits took loans intended only for those with fewer than 500 employees, Fox Business reported.
Of the more than $800 billion in PPP loans granted to employees to pay their staff during the pandemic, 95 percent have been forgiven. Of the $35 billion given specifically to nonprofits, 98 percent has been forgiven.
The OIG recommended the SBA review the loans to ensure eligibility requirements were met, and if not, to seek repayment of the loans.
One such potentially unqualified nonprofit was the YMCA of the Rockies, which received a $3.5 million loan. Goodwill of Southwestern Pennsylvania received over $6 million. While it wasn’t eligible when it applied, updated guidance later made it eligible, according to the report.
The American Rescue Plan Act updated the limit of fewer than 500 employees to fewer than 500 people at each location.
Although the Inspector General asked the SBA to review all 179 organizations in question, the SBA agreed to review only 27, leaving the matter unresolved. The OIG report concluded, “we will attempt to reach agreement with management on this unresolved recommendation.”
Reflecting the confusion at that time the PPP loans were extended to nonprofits in 2021, more than two dozen charities sent a letter to SBA officials, asking for clarification on how to count employees, and if nonprofits would be eligible if they had 500 employees, per physical location, or in total at all locations.
While these nonprofits weren’t accused of outright fraud, many others have been.
As much as 10 percent of the total funds — $80 billion — were lost to fraud, NBC News reported.
Conceding that much of the PPP funding was “wasted and stolen,” Sen. Dick Durbin (D-Ill) said a loan for $140,000 was falsely issued under his son’s name to a non-existent Durbin Construction Co. using his son’s stolen identity.
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