SBA's AI fraud pilot lacked required safeguards, OIG says

The SBA's Office of Inspector General said the agency's pilot using Palantir software to detect fraud in pandemic-era loans was not classified as a high-impact AI use case. That omission meant the pilot skipped required risk-management steps such as impact assessments, appeals and human oversight.

• SBA used Palantir software to flag fraud in PPP and EIDL loans
• The agency suspended 111,620 California borrowers over suspected fraud
• OIG: the use case is missing from SBA's public AI inventory
• Recommendations include a formal high-impact classification process