Fed Renovation Project Found Mismanaged, No Criminal Wrongdoing
The Federal Reserve's internal watchdog has released a report concluding that the central bank mismanaged its $2.4 billion building renovation project, but found no evidence of criminal wrongdoing.
The inspector general's 120-page report stated that the Fed's Board of Governors and staff made several key mistakes that inflated the cost of the project, including failing to secure a comprehensive cost estimate at the beginning of the project and not setting a maximum overall cost.
The construction costs more than doubled from an original estimate of $921 million in February 2020 to $2.018 billion by December 2024, with some aspects of the project criticized for being luxurious, such as water fountains and private elevators.
However, the report found that these features were not significant drivers of the excessive costs, but rather a design change in 2023 from an open workspace to one with mostly closed office space caused a delay in the project's design and prevented the Fed from seeking a maximum cost ceiling for the project at that time.