- SBA has drafted AI strategy and policy documents
- OIG issues six AI governance recommendations
- The 2026 FedCiv Summit will explore AI, IT modernization and more
The Small Business Administration has designated a chief AI officer and publicly disclosed most of its planned and operational AI applications as part of its work to meet federal mandates, according to a management advisory from SBA’s Office of Inspector General.
As SBA builds out governance structures for its AI pilots, agencies across the federal civilian landscape are working through similar questions on technology adoption and oversight. Government and industry leaders will gather at the Potomac Officers Club’s 2026 FedCiv Summit on Oct. 29 to discuss AI, federal IT modernization, shared services, digital labor, trusted information sharing and more. Register now to hear from the officials guiding federal civilian technology priorities.
SBA said the OIG review, released Thursday, assessed its adherence to the Office of Management and Budget memorandum M-25-21 and related executive orders.
What Steps Has SBA Taken on AI Implementation?
According to the OIG report, SBA met OMB’s June 2, 2025, deadline for naming a chief AI officer. The agency has also published an AI use case inventory on its website, which listed 34 applications either in operation or in planning as of March. Of those, 23, or 68 percent, involve generative AI, and 19, or 56 percent, involve personally identifiable information.
Other activities the OIG cited include:
- Pilot programs: SBA is testing several AI models, including a tool to spot fraud in loans it has already disbursed, along with applications designed to support staff productivity.
- Working group: The agency reported in January that it had reinstated an AI council and working group.
- Infrastructure upgrades: SBA officials told the OIG the agency spent the past year strengthening its IT infrastructure, network reliability and cloud capacity to prepare for more advanced tools.
In a Sept. 14 response to the draft report, SBA Deputy Chief Information Officer Douglas Robertson said the agency has formed an AI governance board that has held meetings, with its charter slated for submission to the administrator for approval by Wednesday.
SBA also reported drafting the following documents, each awaiting final sign-off with Wednesday as the target completion date:
- An AI strategic plan and an M-25-21 compliance plan, both set for posting on sba.gov/ai
- A generative AI policy
- An AI alignment standard operating procedure covering IT infrastructure, data, privacy and cybersecurity policies
- A policy and standard operating procedure for AI use case inventory reporting, which includes provisions for identifying high-impact uses
What Did the OIG Recommend?
The OIG called on the SBA administrator to direct the chief AI officer to:
- Finalize the governance board charter and bring agency officials together to oversee AI implementation.
- Complete and publish the AI strategy and compliance plan on sba.gov/ai.
- Set up a process to review and revise internal IT infrastructure, data, privacy and cybersecurity policies in line with federal AI guidance.
- Create a generative AI policy that outlines acceptable uses, safeguards and oversight mechanisms.
- Establish a method for gathering AI use cases agencywide and post an updated inventory at least once a year. The OIG found that a pilot for detecting pandemic loan fraud was absent from the published inventory.
- Adopt a consistent process for classifying high-impact AI uses and document any determination that a use case falls outside that category.
SBA agreed with each recommendation. The OIG said all six have been resolved and will be closed once the agency submits proof that it has carried out its planned corrective actions.
What Other Initiatives Has SBA Rolled Out Recently?
The OIG advisory follows a series of SBA moves to support small businesses in critical sectors. In August, the agency launched the Smaller War Plants Commission with the Department of War to invest in small defense industrial base suppliers. That same month, SBA partnered with the Department of Energy to create the Small Business Investment Company-Energy Initiative, which steers private capital toward small energy businesses.
SBA proposed size standard changes that would add over 110,000 companies to the small business pool. In July, the agency opened a $9 million funding competition to strengthen domestic supply chains.
