Fed Building Renovation Project Found to be Mismanaged

The Federal Reserve's $2.4 billion building renovation project was widely mismanaged, according to a 120-page report by the central bank's internal watchdog.

The inspector general found that the Board of Governors and staff made several critical errors, including failing to secure a comprehensive cost estimate at the beginning of the project and not setting a maximum overall cost.

This lack of planning allowed construction costs to spike after work began in 2022, with prices more than doubling from an original estimate of $921 million in February 2020 to $2.018 billion by December 2024.

The report also found that a design change made by the Fed in 2023 significantly delayed the project's design and prevented it from seeking a maximum cost ceiling for the project at that time.