SBA Falls Short on Mandated AI Disclosure, GAO Warns

The Small Business Administration (SBA) has not consistently met federal artificial intelligence (AI) use case reporting requirements, limiting public and congressional oversight of the agency’s AI activity, the Government Accountability Office (GAO) said Monday. 

GAO said SBA failed to publish required AI inventories from 2021 through 2024, despite federal mandates – including the Advancing American AI Act – that require agencies to annually identify and report AI systems in development, in use, or decommissioned. 

SBA published its first public AI inventory in March 2026. The agency reported seven use cases in its 2025 inventory, but SBA officials told GAO those efforts remain in early development and “are not close to full implementation.” 

According to GAO, SBA officials said the lack of public reporting was partly because officials believed there were no qualifying AI systems, even though at least one reportable system was in use.  

In 2024, the agency maintained an internal inventory but did not release it publicly. While SBA officials could not fully determine why inventories weren’t published, they cited “a lack of documentation and turnover among staff responsible for AI reporting.” 

GAO attributed the reporting gaps in part to the absence of formal policies and procedures, noting SBA “does not have policies and procedures in place to ensure that reporting requirements are met.”  

“By establishing policies and procedures for reporting AI use cases – including defining roles and responsibilities and documenting their implementation – SBA would be better positioned to ensure it reports its applicable AI use inventory,” GAO said.  

“Until SBA does so, transparency will remain limited, hindering information sharing and public and congressional oversight of agency AI use,” the watchdog added. 

GAO recommended that SBA establish formal policies, roles, and documentation practices to meet federal requirements. SBA agreed with the recommendation.