National Restaurant Association and Lawmakers urged SBA to disperse undistributed RRF grants to eligible businesses.
GAO (Government Accountability Office) just issued a “Restaurant Revitalization Fund: Opportunities Exist to Improve Oversight” report indicating $180 million of undisbursed funds. According to Small Business Administration Officials, these unobligated funds include $56 million from returned awards and $24 million set aside for litigation. The Remaining comes from ‘realized or anticipated recoveries,’ say’s SBA.
GAO Report about SBA RRF Grant
GAO report analyzed that out of 88 percent eligible applicants, only 40 percent received the RRF grant. One hundred seventy-seven thousand food service businesses who applied for funds didn’t receive anything.
Initially, the RRF program prioritized veterans, women, and members of economically or socially disadvantaged groups— which make up nearly three-quarters of all recipients. Later SBA had to step back after losing the lawsuit defining this policy as discriminatory.
The Government Accountability Office report also indicated four thousand grant recipients had been tagged for suspected fraud. Among these, one receiver potentially cashed 8 million dollars from the RRF grant.
US Lawmakers Letter to SBA
Following the report, on the 9th of August, 2022, U.S Lawmakers wrote a letter to SBA urging the recovery and release of funds.
Based on the GAO report, this letter clearly states, “award unobligated Restaurant Revitalization Fund (RRF) funding immediately to eligible applicants and that it specifically prioritizes any of the approximately seven thousand applicants that were awarded grants in 2021 but were not able to receive funding.”
The Lawmakers further urged SBA to recover funds given to ineligible applicants. The letter also referred to GAO-identified systematic control weaknesses of SBA. For instance, the Small Business Administration doesn’t require grant recipients to share their operating status, even though the statute demands permanently closed businesses to return their unused funds.
In addition, SBA itself identified receivers who don’t meet the statute eligibility criteria. Money recovered from ineligible and fraudulent setups should be distributed to multiple businesses that were unable to receive Restaurant Revitalization Fund money, says Lawmakers.
The U.S Congress Representatives hankered to prioritize any of the approximately 7000 eligible applicants who were awarded grants back in 2021 but didn’t receive any money yet.
NRA Demands From SBA
The National Restaurant Association has also demanded the SBA to distribute grants among the eligible businesses by saying in a letter, “under your leadership, the program has provided relief for over 100,000 restaurant owners, but as you are aware, over 177,000 applicants are desperately waiting for word on whether they will ever receive funding.”
The Ex. Vice President of NRA, Sean Kennedy, says, “ARPA of 2021 does not create a $24 million litigation set aside for the SBA to administer. While ARPA does direct returned or reclaimed RRF awards to the Department of Treasury, it would be consistent with the spirit of the law to utilize all unobligated funds to address the RRF shortfall.
EVP Sean Kennedy necessitated the immediate release of funds by mentioning, “restaurants remain battered with worker shortages, runaway food costs, and an uncertain level of customer confidence in the coming months.”
NRA urged Small Business Administration to disburse all remaining grants among the eligible applicants in a fair and timely manner.