Fed Watchdog Finds Mismanagement in $2.4B Building Renovation
The Federal Reserve's internal watchdog has released a report on the $2.4 billion renovation project of two Fed buildings. The report found that the central bank mismanaged the project, but did not find any criminal violations. The costs of the project more than doubled from an original estimate of $921 million in February 2020 to $2.018 billion by December 2024.
The Federal Reserve's inspector general said that the Board of Governors and staff made key decisions that effectively transformed the contract into a cost-plus reimbursement contract with a pay-as-you-go approach. This led to excessive costs, including unexpected expenses such as asbestos remediation and additional demands from review agencies.
President Donald Trump seized on the report to renew his call for Jerome Powell to resign from the Fed. Powell's term as chair ended in May, but he has remained on the board as one of seven governors until January 2028.