Fed Mismanaged $2.4 Billion Renovation Project, But No Criminal Wrongdoing Found

The Federal Reserve's internal watchdog has found that the agency mismanaged its $2.4 billion building renovation project, but did not discover any evidence of criminal wrongdoing.

The inspector general's report, released on Wednesday, criticized the Fed's Board of Governors for failing to secure a comprehensive cost estimate at the beginning of the project and for not setting a maximum overall cost.

Prices for the renovation increased significantly after construction began in 2022, with costs more than doubling from an original estimate of $921 million in February 2020 to $2.018 billion by December 2024.

The report found that a design change by the Fed in 2023 contributed to significant delays and cost overruns, as well as the failure to seek a maximum cost ceiling for the project at that time.