Accounting Blog | Fairfax VA CPA firm

SBA Requires All 8(a) Firms to Submit Three Years of Financial Records: What Government Contractors Need to Know

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Estimated Read Time: 6 minutes

On December 5, 2025, the U.S. Small Business Administration (SBA) announced that it has sent letters to all participants in the 8(a) Business Development Program, directing them to submit detailed financial and contract records covering the last three full fiscal years.

More than 4,300 small businesses are affected. This mandate is part of a broader initiative to address concerns about fraud, waste, and abuse in preference-based contracting and to increase oversight of how 8(a) firms operate in the federal marketplace.

For 8(a) government contractors, this is a time-sensitive compliance requirement that directly intersects with accounting, internal controls, and documentation practices.

Core Concept: What the SBA Is Requiring

The SBA letters direct 8(a) firms to upload a comprehensive package of data through the SBA portal. The information covers the last three full fiscal years and includes (as outlined in GovCon legal analysis):

General Ledger for each of the last three fiscal years (CSV)

Trial Balance as of year-end for each of the last three fiscal years (CSV)

IRS Form 4506 covering those years (PDF)

Bank Statements as of the last day of each fiscal year (PDF)

Bank Reconciliations as of the last day of each fiscal year (PDF)

Payroll Register and Payroll Reconciliation, including any owner distributions, for each month in the last three fiscal years (PDF)

List of All Employees, broken out by the contracts they support, for the last three fiscal years (PDF)

List of All Vendors and Joint Ventures for the last three fiscal years (PDF)

Copies of All 8(a) Contracts on which the firm is currently performing, covering the last three fiscal years (PDF)

Subcontracting Agreements related to those 8(a) contracts (PDF)

Financial Statements (at minimum: year-end Balance Sheet, year-to-date P&L, Cash Flow Statement, Statement of Equity) for each of the last three fiscal years (CSV)

Financial Statement Reconciliation to the year-end trial balance for each of the last three fiscal years (CSV)

Sub-ledger Schedules tying to the year-end trial balance for all A/R, A/P, and P&L accounts for each of the last three fiscal years (CSV)

If your firm already submitted specific items as part of its regular SBA annual reporting, the letter indicates those do not have to be resubmitted. However, all remaining requested items must be provided.

Deadline and Consequences

The SBA letters set an extended deadline of:

đź“… January 19, 2026

According to GovCon legal analyses reviewing the SBA letters, firms that do not respond by this date risk being found ineligible to continue in the 8(a) Program and may face additional investigative or remedial actions.

For 8(a) government contractors—especially those with active 8(a) set-aside or sole-source work—this is not just an administrative exercise. It can have a direct impact on future contract opportunities and program status.

Business Impact for 8(a) Government Contractors

This SBA action highlights several important realities for 8(a) GovCons:

1. Financial systems and controls are in the spotlight

The SBA is effectively testing whether 8(a) firms have:

Accurate, reconciled financial records

Clear audit trails across ledgers, financial statements, bank accounts, and payroll

Documentation that ties financial activity to contract performance

These expectations are very similar to what contractors see in DCAA audits and other federal financial reviews.

2. Contract documentation is now a central part of the review

The requirement to submit:

Copies of current 8(a) contracts

Subcontract agreements

Employee lists broken out by contract

shows that the SBA is looking beyond financial numbers and into how work is structured and performed, particularly where pass-through or improper subcontracting arrangements might exist, as noted by Tribal Business News.

3. Firms that are behind on bookkeeping may be under pressure

8(a) firms that:

Have not fully closed prior years

Lack complete reconciliations

Have sub-ledgers that do not tie back to the trial balance

may find it challenging to assemble a clean package on short notice, especially over the year-end period.

Real-World Scenario

Consider a small 8(a) contractor that has grown quickly over the last three years, but:

The trial balance doesn’t match the year-end financial statements

A/R and A/P sub-ledgers are not reconciled to the general ledger

Payroll is not clearly mapped to individual contracts

Bank reconciliations are incomplete or missing for some periods

In day-to-day operations, those issues already complicate month-end close. Under an SBA-driven document request tied to potential fraud or abuse, they can become significant compliance risks.

Guidance: What 8(a) Firms Should Do Now

Here are practical steps 8(a) government contractors can take:

  1. Close and reconcile the last three fiscal years
    Make sure FY23–FY25 (or your last three full fiscal years) are fully closed, reconciled across all accounts, and supported by documentation that matches your ledgers and financial statements.

  2. Validate alignment between statements and the trial balance
    Your year-end Balance Sheet, Profit & Loss Statement, and Cash Flow Statement should tie directly to the year-end trial balance.

  3. Organize contract and subcontract files
    Create a clear, organized folder structure for active 8(a) contracts, related subcontracting agreements, and joint ventures.

  4. Review payroll and labor distribution
    Confirm payroll registers are complete, employees are correctly assigned to the contracts they support, and owner distributions are clearly documented.

  5. Confirm you can export in SBA-required formats
    Test exports to ensure you can produce CSV and PDF files in the formats required.

  6. Engage expert help if cleanup is needed
    If your books are behind or your system isn’t configured for GovCon requirements, working with a GovCon-focused CPA firm can reduce risk.

Key Takeaways

The SBA is requiring all 8(a) Business Development Program participants to submit three full fiscal years of financial, payroll, and contract documentation.

The letters set an extended deadline of January 19, 2026, with potential loss of 8(a) eligibility for firms that do not respond.

This review places strong emphasis on accurate, reconciled accounting records and clear contract documentation.

8(a) firms should begin preparing now by closing prior years, organizing files, and confirming that financial statements tie back to the trial balance and supporting schedules.

VSINGH CPA partners with 8(a) government contractors to:

Clean up and reconcile multi-year financials

Align payroll, contracts, and sub-ledgers

Prepare documentation for SBA, DCAA, and other federal reviews

If your 8(a) firm needs help organizing or validating the records requested in the SBA letters:

📩 Visit www.vsinghcpa.com to schedule a consultation and discuss your specific situation.