Small Business Administration's AI Fraud Pilot Program Audited
It was reported that the artificial intelligence-powered fraud detection tool used by the Small Business Administration lacks necessary federal risk management safeguards.
It was disclosed that the Small Business Administration did not classify the artificial intelligence tool it uses to detect fraud in COVID-19 loan programs as a high-impact use case, and therefore it did not include federal risk management safeguards.
AI Audit Report
The artificial intelligence tool used by the Small Business Administration to detect fraud in COVID-19 loan programs has come under review.
Auditors found that the pilot program in question was not classified as a high-impact use case.
Federal Risk Management
High-impact classification requires federal agencies to meet minimum risk management standards.
However, the audit report included findings that the agency failed to meet these standards.
Palantir Partnership
The agency partnered with Palantir to investigate abuses in pandemic-era loan programs.
It was later announced that this software would be formalized for fraud prevention purposes.
Budget Office Rules
The Office of Management and Budget issued a memo requiring steps to be taken to mitigate potential risks of artificial intelligence tools.
Next Steps
The Administration stated that it accepted the recommendations made to increase compliance with federal artificial intelligence requirements.