After many conversations with people that have received Rescission Letters, as well as with several senators, please see the update below:
This rescission action is a result of a 3-year SBA Office of the Inspector General (OIG) investigation. There was knowledge of SVOG issues early on, and apparently these Rescission Letters are a result of that investigation.
First, everyone I have spoken to thus far did not follow the complete process and obtain a closure letter from the SBA. You had to go through a final audit and receive a Grant Award Closure Letter. The complete process is in the link here:
https://www.sba.gov/document/support-post-application-guidance-svog-applicantsHere
Here is an AI generated version of what is in the SVOG Guidance. You do need to read the SBA Document and follow the law.
The SVOG closeout process for individual grantees involves several steps:
- Final Expense Report: Grantees are required to submit a final expense report through the SBA's SVOG portal, typically within 120 days after the final budget period end date. The final budget period ends 18 months after the SVOG supplemental award date.
- Documentation and Organization: Grantees must gather and organize documentation to support their spending of the SVOG funds, specifically documenting which period amounts were spent in.
- Audit Requirements: Grantees who expended $750,000 or more in federal funds within a fiscal year are generally required to complete a third-party audit.
- Property Compliance and Disposition: If SVOG funds were used to purchase equipment or supplies meeting a certain value, grantees must maintain detailed records and follow disposition instructions if necessary.
- SBA Approval: Closeout is finalized upon the SBA's approval of the final expense report (SF-425).
To completely “closeout” your grant you needed to submit a final expense report, have it approved, and receive a Grant Award Closure Letter. You use form SF-425 which can be found here:
https://justicegrants.usdoj.gov/taxonomy/term/federal-financial-report-ffr-sf-425
I have not yet heard from anyone that followed the above process and received a Grant Award Closure Letter. That does not mean this person does not exist, only that I have not heard from anyone in that situation.
The curious point in all this is that I have not seen a single letter that states the grant is rescinded for failure in filing the final expense report and thus failure to receive a Grant Award Closure Letter.
The reasons presented in every letter I have received speak to not meeting the letter of the law in specific passages of the law, and all reason are listed in the SBA Eligibility Matrix which you can find in the link below.
https://www.sba.gov/document/support-shuttered-venue-operators-grant-eligibility-matrix
The first letter mentioned you actually have three options:
- Pay the amount due within 30 days.
- File a Request for Reconsideration.
- Request to pay in installments of 3 years.
Most everyone I have spoken with is unable to pay the amount due in 30 days, and some even in 3 years. Having said that, 3 years is better than 30 days. They ask you to communicate via svogrant@sba.gov .
Whatever you choose to do, you have only 30 days from the date of your notice. Please make sure you act within those 30 days for your own protection.
I am currently unaware of any law firm up to speed on this or any organization established to assist with this. That does not mean they do not exist, but only that I am not currently aware of any.
If payment is impossible for you I suggest you contact an attorney.
You should also file a request for reconsideration via svogrant@sba.gov . If you are eventually denied reconsideration you can then seek a neutral third-party review in federal court. These appeals are known as final agency actions and are subject to judicial review under the Administrative Procedures Act (APA). This will of course require you to engage an attorney to handle this for you.
You can also contact the SBA National Ombudsman’s office for assistance. Here is the website.
https://www.sba.gov/about-sba/oversight-advocacy/office-national-ombudsman
As with all things government related they do not move at a rapid pace.
Lastly, you can file a comment with this action by the SBA using the Federal Agency Comment Form 508(1) below:
www.sba.gov/sites/default/files/2024-02/Federal%20Agency%20Comment%20Form%20508%20%281%29.pdf
To recap:
- Hire an attorney
- File a Request for Reconsideration at svogrant@sba.gov
- Contact the SBA Ombudsman for help at https://www.sba.gov/about-sba/oversight-advocacy/office-national-ombudsman
- File a comment about the sudden action of the SBA at www.sba.gov/sites/default/files/2024-02/Federal%20Agency%20Comment%20Form%20508%20%281%29.pdf
You must do all of the above at once, as you only have 30 days from the date of your Rescission Letter.
I apologize for not having a simple fix at this moment, but I am working on that. I am unsure where my venture will end, but I suggest you follow the 4 steps above at once.
Thank you and stay tuned,
Michel T. Strickland