Full Breakdown
Fed Inspector General Flags Mismanagement in $2 Billion Renovation, Finds No Criminal Violations
By Drooid · · How we work
Audit Findings and Project Scope
The Federal Reserve’s Office of Inspector General, led by Michael Horowitz, released a 120-page report concluding that the central bank’s $2 billion-plus renovation of two headquarters buildings was “broadly mismanaged.” The board failed to secure a comprehensive cost estimate or a maximum-cost ceiling before work began in 2022, allowing inflation-driven price spikes to inflate the budget. A 2023 design shift from open workspaces to closed offices delayed the project and prevented the Fed from locking in a cost ceiling. Construction costs rose from an original $921 million estimate in February 2020 to $2.018 billion by December 2024, more than doubling the projected amount. The renovation, now expected to finish in December 2027, was originally slated for mid-2024.
Official Responses
Former Fed Chair Jerome Powell, whose term ended in May, remains on the Board of Governors through January 2028 and said he will stay until the Inspector General’s investigation is complete. Current Fed Chair Kevin Warsh, who assumed the role last May, welcomed the findings, noting that the General Services Administration will assume project management and that an independent auditor will assess contracts and seek reimbursement for unperformed work.
Political Reactions
President Donald Trump seized on the report, posting on Truth Social: “He can’t manage a Building, and he certainly shouldn’t be allowed to manage his High Interest Rate Policy,” — Donald Trump, president — Donald Trump, president.
Ongoing Investigations and Future Oversight
A criminal probe launched by the Trump administration into alleged perjury by Powell was dropped in April after a judge quashed subpoenas issued by U.S. Attorney Jeanine Pirro. Pirro indicated she would await the Inspector General’s findings before deciding on further action. The Fed, together with the GSA, will review all contracts and pursue “appropriate remedies,” including potential cost recoveries.
*All statements are attributed to the individuals or offices that made them; no additional speculation is presented.*