Federal investigators from the Government Accountability Office (GAO) released reports Wednesday indicating that millions of dollars intended for small businesses were misallocated due to a weak application process in a SBA program. A Congressional hearing on the investigation is taking place today.

GAO investigators claim the SBA's Historically Underutilized Business Zone (HUBZone) program, intended to boost small businesses in economically depressed areas with federal contracts, allowed wealthy, unqualified businesses to commit fraud and abuse the program.

GAO's six-month investigation into HUBZone, created in 1997, reveals that SBA rarely makes site visits and doesn't verify facts on applications it receives. According to GAO, it was able to obtain HUBZone certification for four false business firms it created to test the soundness of the application process. 

The report states that since 2006, federal agencies gave more than $105 million to these firms that were acting as primary contractors on federal contracts.

The House Committee on Small Business hearing on the investigation takes place today, in Washington, DC. SBA Acting Administrator Jovita Carranza, GAO Director William Shear and Managing Director of GAO's Forensics Audits and Special Investigations Gregory Kutz will participate as witnesses. --Elizabeth Wilson