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Addressing Fraud in the SBIR and SBTT Programs: Recommendations for Reduction
The Small Business Innovation Research and Small Business Technology Transfer programs have been a significant source of federal spending, attracting billions of dollars. However, these programs, known as SBIR and SBTT, are also facing challenges with fraud. In a recent interview on the Federal Drive with Tom Temin, Rebecca Shea, the director of forensic audits at the Government Accountability Office, shed light on the issue.
Shea explained that the SBIR and STTR programs provide awards to small businesses for research and development projects that benefit both the government and the public. However, a recent analysis by the GAO found that out of over 10,000 awards examined, close to a thousand had risk indicators suggesting potential fraud, waste, or abuse.
Some of the key areas of concern identified by the GAO included issues with business size, principal investigator employment, foreign ownership, equivalent work, and facility addresses. Additionally, the analysis revealed cases of potentially duplicative work being funded across multiple agencies, totaling around $445 million.
To address these challenges, the GAO made recommendations to both the Small Business Administration (SBA) and the participating agencies administering the awards. Recommendations included conducting required training for applicants and awardees, enhancing fraud risk assessments, improving data quality, and providing guidance on conducting fraud risk assessments.
Overall, the SBA and the agencies involved have agreed with the recommendations and have started taking action to address the issues identified. The goal is to ensure that the SBIR and STTR programs continue to support innovation and small business development while minimizing the risks of fraud, waste, and abuse.
As the government works to address these challenges, it is essential to maintain the integrity of these programs to support the growth of small businesses and drive innovation in the U.S. economy.
