After developing a new system in January 2005 to approve disaster loans, the SBA "focused only on its historical experience and did not consider the possibility of a single or series of disasters of the magnitude of the Gulf Coast hurricanes when planning," the report said.
As a result, "SBA experienced significant backlogs and delays in processing applications," it concluded. GAO is the investigative arm of Congress.
The full report from the GAO can be viewed here.
Senator John Kerry , the top Democrat on the Committee on Small Business and Entrepreneurship issued the following statement on the report, today:
“Here’s confirmation that in spite of all the promises made after Katrina, nothing much has changed in Washington. Tens of thousands of hurricane victims are still waiting for assistance. Two and a half months to process a disaster loan application is beyond unacceptable. People’s livelihoods are on the line, many of them are losing everything, and still they wait while the SBA gets its act together. Americans demand swift, capable response to disaster, and I will be pressing the SBA to implement the GAO’s recommendations.”
In June, John Kerry introduced legislation to improve the Small Business Administration’s Disaster Loan Program. Many of the provisions in S. 3487 were included in the comprehensive small business reauthorization package passed by the Committee yesterday. There is more information on Kerry’s proposal here.
In related news, AP News reports that a U.N. human rights panel said Friday, "The United States must better protect poor people and African-Americans in natural disasters to avoid problems like those after Hurricane Katrina."
The U.N. Human Rights Committee said poor and black Americans were "disadvantaged" after Katrina, and the U.S. should work harder to ensure that their rights "are fully taken into consideration in the reconstruction plans with regard to access to housing, education and health care."