Shuttered Venue Operators Grant Program Closes for Repairs on Opening Day

April 9, 2021

The U.S. Small Business Administration (SBA) opened its application portal for the $16.25 billion Shuttered Venue Operators Grant (SVOG) program Thursday but shortly afterward shut it down for repairs due to technical difficulties that prevented the platform from accepting applications.

On Thursday afternoon, business owners began saying on social media they were unable to upload supporting documents for their applications. The SBA acknowledged the technical difficulties in a tweet and said it was working to resolve the issues as quickly as possible. Later in the afternoon, the SBA posted on the program’s webpage that it was temporarily shutting down the portal while it works with the platform’s vendors to solve the problems. The SBA said it would share advance notice of the time and date before the portal reopens so all applicants can be prepared.

The SBA also stated in a press release issued late Wednesday that it is accepting SVOG applications on a first-in, first-out basis and allocating applicants to respective priority periods as it receives applications. The first 14 days of awards, which are expected to begin in late April, will be dedicated to entities that suffered a 90 percent or greater revenue loss between April and December 2020 due to the COVID-19 pandemic. Days 15-28 will include entities that suffered a 70 percent or greater revenue loss between April and December 2020. Following those periods, awards will include entities that suffered a 25 percent or greater revenue loss between one quarter of 2019 and the corresponding quarter of 2020.

In addition to the technical issues, in a report issued less than 24 hours before the SVOG program was to open, the Office of Inspector General (OIG) for the SBA expressed “serious concerns” with the control and tracking of performance results of the program, specifically criticizing the audit plan created by the SBA’s Office of Disaster Assistance (ODA).

The ODA’s plan mandates audits of all $10 million grants and also requires recipients of grants with multiple payments to submit documentation showing how they spent the funds prior to receiving the next installment. The plan allows for a total of no more than 10 audits across all low-risk loans, the OIG report stated. Because program officials estimate the majority of SVOG grants will be characterized as low risk, most grants will “be disbursed in sweeping lump sum payments with minimal requirements and expectations for post-award accountability,” the report said. As the ODA estimates the SBA will receive 15,000 applications and that the average SVOG size will be $1 million, the inspector general said that the low level of auditing and spending reviews for low-risk grants means that “the bulk of grant funds will not be subject to a reasonable degree of scrutiny.”

Asked via email about the OIG report, SBA spokesperson Andrea N. Roebker replied, “Re: the OIG report, the Small Business Administration submitted a thorough and rigorous oversight and audit plan for the Shuttered Venue Operators Grant program. The SBA is working hard to support our nation’s entrepreneurs and small businesses, and we are committed to continuing assessments and making modifications where appropriate. Consistent with President Biden’s statements on the importance of preventing waste, fraud, and abuse for the economic relief programs, we will continue to work with the IG’s office on this and other SBA programs that are made available to the American people.”

TSCPA will continue to provide updates to this story.