Page 63 GAO-23-105331 COVID Relief
For the purposes of these programs, a business entity is defined by its tax
filing. If a business with three locations submits one tax return under a
single EIN, that business should have submitted a single PPP or COVID-
19 EIDL application representing the three locations. Businesses can
have different EINs for different segments of the business, including
locations. If a business submits individual tax returns under unique EINs
for each of the three locations, the locations would be treated as
individual businesses. Therefore, each of the three locations could submit
corresponding PPP or COVID-19 EIDL applications as an individual
business entity within the rules of the programs.
Our analysis of the loan- and advance-level data identified almost
22,000 unique recipients who submitted multiple separate applications
that were approved and funded, though both programs generally limited
individual businesses to a single application. This indicates that these
recipients may have misrepresented business information on their
applications to obtain additional funds they were not eligible for. See
sidebar, as well as appendix I, for further details on how we performed
our analysis.
Specifically:
• PPP. We identified almost 2,500 unique recipients who received at
least two unique PPP loans, contrary to program limits of one loan for
each unique business. Of these recipients, over 1,500 had received
loan forgiveness totaling approximately $109 million as of December
31, 2021.
• COVID-19 EIDL. We identified about 19,500 unique recipients who
received at least two unique COVID-19 EIDL loans or advances. Of
these recipients, almost 16,600 received approximately $95 million in
advances that are not required to be repaid.
In addition, we identified 13 unique recipients who received multiple
unique PPP loans and multiple unique COVID-19 EIDL loans or
advances.
For example, we identified one recipient approved for one unique first
draw PPP loan in June 2020 and another first draw PPP loan in April
2021. This recipient also received COVID-19 EIDL loan and advance
funds from two separate applications accepted on different dates in June
2020. This recipient received over $967,000 from both programs.
Identifying Unique Recipients from Unique
Loans and Advances
There were a total of 18.3 million unique loans
or advances distributed through the Paycheck
Protection Program (PPP) and the COVID-19
Economic Injury Disaster Loan program
(COVID-19 EIDL). However, we describe the
results of our analyses in terms of the
13.4 million unique recipients, not unique
loans or advances.
Our initial review of PPP loan-level data
showed that applicants frequently used
business information (employer identification
number and business name) for the first draw
application and personal information (Social
Security number and owner name) for the
second draw application, or vice versa.
To avoid double-counting these recipients,
and to identify other individuals that received
more than one unique loan or advance, we
used combinations of key identifying
information to determine if multiple loan or
advance records belonged to the same
unique recipient.
For example, if the same tax identification
number (tax ID), business name, and address
were associated with more than one record,
all records were associated with a single
unique recipient. This could be a recipient of
multiple loans within one program, or a
recipient who received one PPP loan and one
COVID-19 EIDL loan or advance.
We also considered all records with the same
business name and address but a different
tax ID as a single unique recipient. In some
cases, the different tax ID may be a data entry
error. However, it is also an indicator of fraud
by an individual potentially altering a single
identification field to avoid detection.
Source: GAO. | GAO-23-105331