The Federal Reserve’s Office of Inspector General said its review of the Fed’s
$2.4 billion Washington headquarters renovation found no evidence of federal
crimes warranting referral to the U.S. Department of Justice. The OIG cited
project-management deficiencies — inadequate cost controls, oversight and
governance — and said the Fed Board failed to implement effective cost caps or a
clear maximum-construction-cost control mechanism. Costs rose from a 2020 budget
of $1.3 billion largely due to design adjustments, site and construction
conditions, inflation and instances of work without competitive bidding; the
report said controversial design elements were not the main driver of the
increase. Fed Chair Kevin Warsh said the Fed will implement OIG recommendations
and hire an independent auditor to review approved project costs. The project
had drawn criticism from Trump and Republican lawmakers over perceived
overspending.
