SBA’s AI fraud detection pilot didn’t include needed safeguards, OIG says
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ByEdward Graham,
Managing Editor, Nextgov/FCW
September 29, 2026 02:17 PM ET
The federal agency that supports the growth of U.S. small businesses has been using Palantir software to identify fraud in disbursed pandemic assistance loans.
The Small Business Administration has been using an artificial intelligence tool to detect fraud in its COVID-19 loan programs, but it did not label the then-pilot as a high-impact use case — a classification that requires federal agencies to meet minimum standards for risk management practices, according to SBA’s Office of Inspector General.
In a management advisory publicly released on Monday, the watchdog noted that the agency has been piloting an AI program to identify fraud in disaster assistance loans, including the Paycheck Protection Program and Economic Injury Disaster Loans.
OIG said SBA did not include the fraud pilot on the latest AI use case inventory listed on...
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