Fed's $2.4B Renovation Project Plagued by Mismanagement and Cost Overruns
The Federal Reserve's $2.4 billion building renovation project has been plagued by mismanagement and cost overruns, according to an internal watchdog report. The inspector general found that the Fed's Board of Governors and staff failed to secure a comprehensive cost estimate at the beginning of the project, allowing prices to spike after construction began in 2022.
The report said that the construction costs more than doubled from an original estimate of $921 million in February 2020 to $2.018 billion by December 2024. The project is expected to last until December 2027, long past its originally slated completion date of mid-2024.
Despite criticism from the Trump administration and Republican members of Congress, including President Donald Trump's visit to the construction site in July 2025, the inspector general found no evidence of criminal wrongdoing. However, the report did criticize the Fed for deviating from its cost-management provisions and failing to secure a maximum overall cost.
Current Fed chairman Kevin Warsh welcomed the IG's findings and said that the General Services Administration would take over the management of the project. The Fed will also engage an independent auditor to evaluate the building project and all its costs.