More than a year after the U.S. Small Business Administration revealed its Restaurant Revitalization Fund had run out of money, federal watchdogs say they’ve found $180 million still in the kitty, prompting industry advocates to demand the aid be distributed immediately.
“Now more than ever, every dollar appropriated by Congress for restaurant relief needs to be unlocked and put in the hands of operators struggling to keep their doors open,” Sean Kennedy, EVP of public affairs for the National Restaurant Association, wrote in a letter to SBA Administrator Isabella Guzman.
The communication demands the funds be passed along to restaurant applicants who qualified for RRF grants after the $28.6 billion pool created by Congress had been drained, a process that took only three weeks. At the time the RRF ran dry, the SBA said it would keep the unfilled grant requests in the order in which they were received in case Congress replenished the pool.
About 177,000 restaurants were left empty-handed. Lawmakers calculated that an additional $40 billion would be needed to provide those applicants with grants of up to $10 million.
Despite aggressive lobbying by restaurateurs and their advocates, Congress has balked repeatedly at allocating more money. Kennedy noted in his letter that a re-up “remains uncertain at best.”
The $180 million in remaining funds were discovered during a review of the RRF grant process by the Government Accountability Office, an independent federal watchdog that ensures money allocated by Congress is spent as intended. The GAO’s focus was on identifying processes that could be exploited by cheaters and scammers, in case the SBA ever ran another RRF program.
In passing, the GAO noted that $180 million remained in the SBA’s coffers. About $24 million had been set aside by the SBA to cover any litigation that might arise out of its administration of the RRF. The rest of the money came from awards that were returned or clawed back because qualifying standards weren’t being met.
The National Restaurant Association zeroed in on the $24 million, noting the law creating the RRF had not specified that a legal fund be carved out of the $28.6 billion allocation.
The discovery of undistributed funds comes as many restaurants are struggling to pay off expenses that were deferred during the coronavirus pandemic. Although industry sales are back to pre-pandemic levels for many establishments, a number of owners are still paying off back rents, tax payments, lines of credit and other financial obligations.
“Restaurants remain battered with worker shortages, runaway food costs, and an uncertain level of customer confidence in the coming months. The need for relief has not abated,” Kennedy wrote in his letter to Guzman. “The need for relief has not abated.”
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