Is the Fed Audited?

The Federal Reserve is extensively audited, as required by federal law. The Federal Reserve System as a whole is subject to several levels of audit and review.

  • Each Reserve bank has internal auditors who report directly to the Reserve bank’s board of directors. This is similar to the auditing structure used by large corporations in the United States.
  • The Federal Reserve Board of Governors oversees the operations of the Reserve banks. The Board has oversight authority for the entire Federal Reserve System.
  • Financial statements of the regional Reserve banks and the Board of Governors must be audited every year by an independent external auditor. The St. Louis Fed’s financial statements are published in our annual report. The Board of Governors’ annual report includes the financial statements of the Board as well as those of the 12 Reserve banks combined.

In addition, the Board of Governors publishes the Fed’s balance sheet on a weekly basis, rather than quarterly as many companies do. The weekly report includes a statement of condition of each Reserve bank.

Fed activities are also routinely reviewed by the U.S. Government Accountability Office (GAO), which is the auditing arm of Congress. For additional information, including GAO reports, see the Board of Governors’ Audit page.

Is Monetary Policy Audited?

Monetary policy is not audited in the traditional sense because there are no clear-cut standards for auditing policy decisions as there are for auditing financial statements, for example. However, over the past few decades, the Fed has become increasingly transparent regarding its monetary policy decisions.

Here are some examples:

  • The Federal Open Market Committee (FOMC) releases a statement that details its policy decisions shortly after each meeting ends. Doing so allows the media, economists and the public to immediately study and comment on each decision.
  • The FOMC releases the minutes of each meeting three weeks later. The minutes provide more insight into policy decisions, as well as into other timely issues discussed at the meeting. Transcripts of meetings are released about five years later.
  • The Fed chair holds regular press conferences after FOMC meetings to discuss the FOMC’s economic outlook and monetary policy decisions in more depth. The first of these press conferences was April 27, 2011, following an FOMC meeting and statement; they have grown in frequency ever since.
  • The Fed chair, vice chair for supervision, and some senior leaders appear before Congress throughout the year to discuss monetary policy, developments in the economy, banking supervision and the economic outlook. They will also participate in Q&A during hearings, answering a wide range of questions from members of Congress. View testimony of Federal Reserve officials.
  • As required by law, in the area of monetary policy, the Board of Governors submits a report twice a year to Congress. View the Monetary Policy Report.
  • The Fed chair, other members of the Board of Governors and presidents of the Reserve banks frequently give speeches outlining their views on monetary policy and explaining recent policy decisions. View the St. Louis Fed president’s remarks and community engagement.
  • As mandated by the Dodd-Frank Act in 2010, the Fed released details about actions it took during the financial crisis to stabilize the financial system.

How Is the Federal Reserve Accountable to the Public?

The Fed is accountable to the public and the U.S. Congress. The members of the Board of Governors are nominated by the U.S. president and confirmed by the Senate.

In turn, the Board of Governors has oversight authority for the entire Federal Reserve System. This includes budget authority; the budget for each Reserve bank must be approved by the Board of Governors.

The Board of Governors appoints three directors (Class C) to each nine-member Reserve bank board of directors to represent the public. The Board of Governors designates a chair and deputy chair from among the three Class C directors. Learn about Reserve bank boards of directors.

In addition, key appointments at each Reserve bank must be approved by the Board of Governors: those of the president and the first vice president. Learn how a Reserve bank president is selected.

To learn more about the Fed’s structure, independence and accountability, read the St. Louis Fed’s Federal Reserve tutorial for all ages.

Back to Top