SBA Lender Files Related to Reviews/Examinations

18. SBA Lender Files Related to Reviews/Examinations

Generally, there are at least three types of files associated with SBA lender reviews/examinations. They are (i) a review/examination file for each individual review/examination of the SBA Lender (hereinafter referred to as the “Review File”), (ii) an active (temporary) review/examination file for any review/examination in active process (hereinafter referred to as the “Active Review File”), and (iii) a permanent file for the SBA Lender. The Review File contains the workpapers generated for each individual SBA Lender review or examination. The Active Review File contains all information for any active review/examination in process. The permanent SBA Lender file contains material and information to assist in the planning of subsequent reviews/examinations. The permanent file also contains information concerning corporate information and the SBA Lender’s relationships with SBA.

a. Review/Examination File

The Review/Examination File is composed of copies of workpapers and documentation developed that documents all Findings. The file will usually contain:

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  Correspondence with the SBA Lender regarding review/examination scheduling;
  
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  Review/examination plan;
  
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  Documentation prepared by the EIC detailing on-site adjustments to the scope of the review;
  
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  Copies of correspondence or other material that would be significant to the planning of future reviews;
  
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  All workpapers relevant to the review/examination;
  
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  Copy of the final Report; and
  
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  Any response from SBA Lender to the Report.
  

b. Active Review/Examination File

The active review/examination file is maintained by the EIC and is intended to be updated annually. The EIC purges material that will not be relevant to the next review. The purged documents should be returned to the original workpapers compilation for the specific review for which they were generated, rather than destroyed. The EIC for the review being planned will be responsible for maintaining and up-dating the active review/examination file. The file will usually contain:

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  Copy of the most recent final Report;
  
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  Current review/examination plan;
  
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  Documentation prepared by the EIC detailing on-site adjustments to the scope of the review;
  
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  Copies of correspondence or other material that may be significant to the planning of future reviews; and
  
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  Any response from SBA Lender to review/examination Findings, as applicable.
  

c. Permanent File

The permanent file serves as a centralized source of background chronological information about the SBA Lender. The following information will be maintained in this file:

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  General correspondence;
  
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  Review scheduling letters;
  
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  Prior Reports and appropriate workpapers;
  
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  Documents relating to the corporate and management structure;
  
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  Formal responses by management to Findings of weakness; and/or
  
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  Copies of approvals and adverse actions.
  

d. Retention Schedule

All permanent files will be warehoused in the SBA at an office designated by the AA/OLO, with both electronic and paper storage media utilized. Copies of any document should be immediately available to the AA/OLO and other OLO staff, as well as any other SBA internal officials as deemed appropriate by the AA/OLO.

e. Loan Files with Material Deficiencies and/or Suspected Fraud

SBA has established grounds for denial or repair of loan guaranty purchase requests (See 13 CFR §120.524 and SOP 50 51, Loan Liquidation and Acquired Property, Chapter 13). During file review, SBA may identify various regulatory, SOP or other policy or procedural requirements that, if not met, may result in a denial or repair when that particular SBA loan is submitted for guaranty purchase. When such a Material Deficiency is identified in an SBA loan file being reviewed, it must be identified and flagged as such in the Agency’s Centralized Loan Chron System (CLCS). The data (needed for) entry will be taken from the SBA loans listed in the Report appendices. The SBA Senior Examiner assigned to the review is responsible for ensuring that SBA loans with Material Deficiencies are flagged in the Agency’s Centralized Loan Chron System (CLCS) database.

19. Distribution of Report

The Report will be distributed to the SBA Lender by the AA/OLO, with instruction to respond to identified Findings. The AA/OLO is also responsible for distributing the Report to the appropriate SBA offices. The SBA Lender generally will receive the Report within 60 days after completion of all on-site activities. Distribution of the Report is strictly prohibited, in accordance with paragraph 15 of this Chapter. SBA employees and contractors must be mindful of the fact that the information contained in Reports will generally be considered by the lender and borrowers that are identified in the Reports to be confidential and proprietary. Therefore, Reports must not be made available to members of the public unless disclosed in response to a Freedom of Information Act request where it has been determined that the information in the Report is not exempt from disclosure under that Act.