The government vows to fix a plagued relief program for live-event businesses.

More than six weeks after the long-delayed program started taking applications, 14,000 businesses have applied for a Shuttered Venue Operators Grant. Only 90 have been awarded one.

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The government vows to fix a plagued relief program for live-event businesses.

The closed Cinerama Dome movie theater in Los Angeles. The Small Business Administration has overhauled a program meant to help music clubs, movie theaters and other venues.Credit…Chris Pizzello/Associated Press

June 10, 2021, 3:36 p.m. ET

The Small Business Administration has essentially ousted the leaders of a deeply troubled $16 billion relief effort for live-events businesses, bringing in a new team to take over and fix the program.

More than six weeks after the long-delayed program started taking applications, 14,000 businesses have applied for a Shuttered Venue Operators Grant. Only 90 have been awarded one. Thousands of applicants are tangled in technical glitches and bureaucratic messes, including an error that led to many people being inaccurately declared dead.

The program, which was enacted into law in December to help music clubs, movie theaters and other venues that were forced to shut down because of the pandemic, had been managed by a team from the S.B.A.’s Office of Disaster Assistance, which also oversees the agency’s $200 billion disaster loan effort.

But on Wednesday, the agency told industry groups that it was shifting the program’s leadership to a group of employees from its Office of Capital Access, which coordinated the $800 billion Paycheck Protection Program and the $29 billion Restaurant Revitalization Fund.

On a Thursday morning call with industry groups, Patrick Kelley, associate director of the S.B.A.’s Capital Access Office, said the agency would quickly resolve the mistaken death reports and speed up the review process, according to two participants on the call.

The Small Business Administration is supposed to review and approve applications in tiers, with those who suffered the deepest financial losses helped first, but its deadline for addressing the first tier of applications was Wednesday — and thousands of those applicants are still waiting. Carol Wilkerson, an agency spokeswoman, said those applicants “remain at the front of the line.”

The changes followed repeated pleas for help from lawmakers and industry advocates. “The agency’s rollout and execution of the grant program has been a disaster,” Representative Greg Stanton, an Arizona Democrat, wrote in a letter sent Wednesday to Isabella Casillas Guzman, the S.B.A. administrator.

Seven trade groups also sent a letter on Wednesday asking the S.B.A. to “immediately fully fund” eligible applications. Entertainment venues are “experiencing a talent drain, cannot reopen and are hanging on by a thread because this funding is not arriving quickly enough,” they wrote.

The problem is becoming especially dire for businesses trying to salvage their summer season. Without money from the grant program, many are unable to hire staff, book performers, stock up on supplies and pay overdue bills.

Tracey Tee, the chief executive of Band of Mothers Media, which puts on a women’s comedy tour, got an email from the S.B.A. last week with the same news that has bedeviled thousands of venue owners and producers around the country. “Your name,” the email said, “appears on the Do Not Pay list with the Match Source DMF.”

Translated from bureaucratic jargon, it told Ms. Tee that she was considered dead.

“We are in debt up the wazoo,” Ms. Tee said. “We can’t afford to put shows back on the road because there’s no cash.”

Like virtually all producers, Band of Mothers — which puts on a “moms’ night out” music and comedy event called “The Pump and Dump Show” — was grounded by the pandemic last year, and has had little opportunity for revenue since. At the beginning of 2020, the company employed 13 people — most of them mothers of young children — but has since reduced its staff to two.

After receiving the email, Ms. Tee began a Kafkaesque effort to prove that the government’s information was incorrect. She called the Social Security Administration, which she said was unhelpful. An operator at her local office was friendly but said: “I think you’re being spammed or scammed,” Ms. Tee recalled.

The Small Business Administration has said little about the problem publicly. But in correspondence among applicants, the agency has acknowledged that the problem seemed to be a result of conflicts between employee identification numbers, which apply to businesses and nonprofit groups, and Social Security numbers, which apply to individuals. If a company has the same employee identification number as a dead person, the agency flagged that application as flawed.

Ms. Wilkerson, the S.B.A. spokeswoman, said the agency was working to clear up the problem and move applications forward. Mr. Kelley said on Thursday’s call that applicants should finally see the results of those efforts — and a wave of approvals — next week, according to participants on the call.

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