Fed's Building Renovation Project Overshot Budget by Billions
The Federal Reserve's internal watchdog has released a report on the central bank's building renovation project, which has been marred by cost overruns and controversy. The inspector general found that the Fed broadly mismanaged the $2.4 billion project, but did not identify any criminal wrongdoing.
The report states that the Board of Governors and staff made several missteps, including failing to secure a comprehensive cost estimate at the beginning of the project and not establishing a maximum overall cost. As a result, prices spiked after construction began in 2022.
The Fed's chairman, Jerome Powell, was criticized by the Trump administration for his handling of the project, with President Donald Trump even visiting the construction site last July to tout the project's costs. However, the inspector general found that the design change from a mostly open workspace to one with mostly closed office space caused significant delays and increased costs.
The report also notes that other factors, such as inflation and unexpected expenses, contributed to the cost overruns. The Fed has agreed to engage an independent auditor to review the project's contracts and pursue appropriate remedies, including seeking reimbursement for any work paid for but not performed.