Illustration by Megaton
Image: Illustration by Megaton

Regulation

Congress pushes SBA for AI transparency after compliance failure

By Julius RobertSaturday, May 23rd 2026

New legislation would mandate annual reporting on the agency's use of artificial intelligence systems

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Congress pushes for transparency from sba after failure to comply with federal reporting requirements on use of artificial intelligence systems; new legislation would require annual reports on how the SBA utilizes machine learning technologies

Legislation recently passed by the House of representatives’ small business committee is intended to require the Small Business Administration (SBA) to make public the way it utilizes artificial intelligence, following recent media reports that the sba failed to comply with mandatory federal reporting requirements related to the agency’s utilization of AI. As reported by FedScoop on May 22, 2022, the “sba artificial intelligence utilization act” will require annual reports from the sba detailing its use of AI and machine learning tools. This requirement was spurred by a recent audit by the Government Accountability Office (GAO) revealing that the SBA has not been compliant with current federal regulations that require the maintenance of an inventory of all instances where AI is utilized within the agency.

Wide gap exists between enforcement mechanisms and executive orders and policies establishing required maintenance of an inventory of government agency use of automated systems

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The recent GAO audit highlights the challenges that exist throughout the federal government regarding monitoring how each agency deploys automated systems. Although executive orders and policies have established required maintenance of an inventory of each agencies use of AI, the sba's lack of compliance indicates that there may be challenges with enforcing requirements.

This legislation appears to demonstrate bipartisan support for oversight of AI in government agencies; however, passage of the legislation remains uncertain at this time. The legislation represents one of several efforts currently being pursued by Congress to establish clearer frameworks for governmental uses of AI. These efforts follow recent trends among agencies to increase usage of automated systems for application processing, fraud detection and management of day-to-day operations.

Editorial illustration for Congress pushes SBA for AI transparency after compliance failure
As reported by FedScoop on May 22, 2022, the “sba artificial intelligence utilization act” will require annual reports from the sba detailing its use of AI and machine learning tools.
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