A Government Accountability Office report has found that the Small Business Administration has not consistently met 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 Reporting?
According to the report published Monday, agencies are required to publicly disclose specific AI use cases, including how systems are designed, developed and procured, since 2020. However, SBA did not release its first AI use case inventory until March 2026.
The report cited multiple reasons for SBA's failure to comply with reporting requirements. Between 2021 and 2023, SBA officials believed the agency lacked reportable AI use cases. In 2024, SBA maintained an internal inventory but did not publish it, citing a lack of documentation and staff turnover.
SBA’s failure to disclose AI use has drawn congressional attention. In 2024, Sen. Joni Ernst, R-Iowa, sent a letter to the agency, questioning why it did not report certain use cases despite publicly acknowledging that officials have utilized AI for fraud detection in loan programs and pandemic relief screening efforts, FedScoop reported.
As of April 2026, SBA said AI policies remain under revision and reporting processes are still being developed.
What Did GAO Recommend?
The congressional watchdog called on SBA to establish policies and procedures to ensure it consistently meets requirements for publicly reporting AI use case inventories. SBA must also define roles and responsibilities for reporting and document the implementation of policies and key decisions.
SBA concurred with the recommendations.
What Are the Possible Uses of AI at SBA?
In the report, GAO also identified ways AI could support SBA missions, including conducting market research, reviewing proposals, analyzing agency-submitted data, drafting required reports, and detecting and preventing fraud.
The report noted that SBA, which oversees Offices of Small and Disadvantaged Business Utilization and the Small Business Innovation Research and Technology Transfer program across government, could use AI to improve efficiency in managing data and reporting requirements.
However, GAO warned that the technology can produce inaccurate outputs, create data privacy and security concerns, and deliver biased outcomes that could affect decision-making processes.
In addition, according to the congressional watchdog, agencies may face challenges in implementing AI, such as limited technical expertise and complex approval processes for new technologies.
