Similarly, the OIG found 161,197 independent contractors who claimed more than one employee on their applications and received grants of more than $1,000 yet did not provide an EIN. The SBA should have disbursed no more than $161 million in all to these people but wound up giving them $1.1 billion. 

"The $4.5 billion overage in Emergency EIDL grants to sole proprietors and independent contractors could have been used to provide funding to thousands or millions more eligible small businesses," said the OIG report. "When the funds ran out in early July 2020, there were over 6 million applicants in process who were eligible for a grant but had not received one. More than 7.3 million applicants later applied for an EIDL loan but could not request a grant because the funds were exhausted."

"We recommended that SBA remedy $4.5 billion in funds disbursed in excess of its policy allowance to sole proprietors and independent contractors," the OIG report stated, adding,. "SBA disagreed with the prior Administration’s policy determination, which is the criteria used to premise our findings. Despite management’s disagreement, the agency is taking corrective actions to implement our recommendation."