DLARA
DLARA (Disaster Loan Accountability and Reform Act) aims to tighten accountability and transparency for the Small Business Administration’s (SBA) disaster loan program. It would require more frequent and more detailed reporting on disaster loan obligations and costs (including separate budgeting for regular disaster loans and COVID-EIDL loans), impose a temporary funding control if loan program funds run low, and strengthen oversight through mandatory GAO and Inspector General reviews plus an enhanced forecasting/funding process. In short, the bill seeks to curb funding shortfalls, improve budgeting accuracy, and increase congressional and public visibility into how disaster loan dollars are obligated, disbursed, and accounted for. Key elements include: enhanced monthly reporting with new data elements; explicit budget line items and 10-year cost comparisons for both SBA disaster loans and COVID-EIDL loans; a temporary mechanism to restrict loan obligations when funding is low (with a 14-day disbursement requirement if invoked) and a sunset after four years; mandatory GAO and Inspector General reviews of funding shortfalls and rule changes; and a structured process for ongoing budget forecasting corrections and updates to Congress.
Key Points
- 1Enhanced monthly disaster loan reporting
- 2- Removes narrow disaster-period language and requires timing for funding milestones (when funding reaches 10% of the latest 10-year average and when funds are depleted) plus a new requirement to report changes to estimates or assumptions with supporting data; introduces a travel prohibition if reports are late.
- 3Expanded budget disclosure for disaster loan costs
- 4- Requires separate budget submissions for: (A) SBA disaster loan costs (current, 10-year average, and explanations for differences) and (B) COVID-EIDL loan costs (current, 10-year average, and explanations); similarly requires separate statements for administrative costs related to both programs; defines COVID-EIDL vs. SBA disaster loans.
- 5Temporary funding limitation if funds are low
- 6- When unobligated funds fall below 10% of the 10-year average cost, the Administrator must notify Congress; during the interim period until new appropriations are made, obligating funds for direct loans may be limited to the amount of each loan for which collateral is required; requires a 14-day disbursement to clear remaining outstanding loan balances if this authority is used; sunset after four years.
- 7Oversight by GAO and implementation reviews
- 8- Requires a GAO report within 180 days on loan-account funding dynamics and borrower disbursement patterns, plus a mandated Administrator response within 90 days with an implementation plan; requires a separate GAO review of costs and subsidies from two rule changes (2013/2023-2024 final rules) within one year.
- 9Strengthened budget forecasting and accountability
- 10- Mandates early corrective actions to improve forecasting and data quality for disaster loan costs, with updates every 90 days until all corrections are implemented; ties congressional reporting to concrete actions demonstrating how corrections address forecasting and budgeting accuracy.