A Government Accountability Office report found that the Small Business Administration consistently failed to meet federal requirements to publicly disclose how it uses artificial intelligence, raising concerns about transparency.
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What did GAO find about SBA’s AI report?
Starting in 2020, government agencies will be required to publicly disclose certain AI use cases, including how their systems are designed, developed and procured, according to a report released Monday. However, the SBA did not release its first AI use case list until March 2026.
The report cites multiple reasons why the SBA failed to comply with reporting requirements. From 2021 to 2023, SBA officials believed that the SBA had no reportable AI use cases. In 2024, the SBA kept an internal inventory but did not release it due to lack of documentation and staff turnover.
The SBA’s failure to disclose its use of AI caught the attention of Congress. In 2024, Sen. Joni Ernst (R-Iowa) wrote a letter to the agency questioning why it was not reporting certain use cases, even though the agency has publicly acknowledged using AI to detect fraud in loan programs and pandemic relief review efforts, FedScoop reported.
The SBA stated that as of April 2026, the AI policy is still being revised and the reporting process is still being developed.
What did GAO recommend?
Congressional oversight agencies have called on the SBA to establish policies and procedures to ensure it consistently meets requirements for publicly reporting its inventory of AI use cases. The SBA must also define reporting roles and responsibilities and document implementation of policies and key decisions.
The SBA agreed with this recommendation.
What is the potential for leveraging AI in SBA?
In its report, GAO also identified ways that AI can support the SBA’s mission, including conducting market research, reviewing proposals, analyzing data submitted by government agencies, preparing required reports, and detecting and preventing fraud.
The report notes that the Office of Small and Disadvantaged Business Utilization and the SBA, which oversees the government-wide Small Business Innovation Research and Technology Transfer Program, could leverage AI to improve efficiency in data management and requirements reporting.
However, GAO warned that this technology could produce inaccurate output, raise data privacy and security concerns, and result in biased results that could affect the decision-making process.
Additionally, according to Congressional Oversight Agencies, agencies may face challenges in implementing AI, including limited technical expertise and complex approval processes for new technologies.
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