Inspector General Report Criticizes Federal Reserve's Management of $2.5 Billion HQ Renovation

An Inspector General report released on September 30, 2026, criticized the Federal Reserve for mismanaging its $2.5 billion headquarters renovation project, while also clearing former Fed Chair Jerome Powell of any criminal wrongdoing. The report highlighted that the project's costs increased significantly from an initial estimate of $921 million, leading to taxpayer liability. The review described the Fed's management as ineffective, pointing out that the decision to switch from open workspaces to private offices caused a 21-month delay in design progress. Additionally, costs for mechanical and plumbing work surged by nearly $500 million, with the Fed approving payments without securing the required competitive bids. The report stated that the Fed failed to establish a total project cost and spending limit, which contributed to the financial mismanagement. The Inspector General noted that the initial renovation plans included luxury features, but these were removed following public and congressional scrutiny. The report also mentioned that attempts to investigate Powell regarding his testimony about the project costs were halted by judicial decisions. Senator Tim Scott, chair of the Senate Banking Committee, emphasized the Fed's responsibility to manage resources prudently, despite rising material costs during the pandemic. The White House and the Federal Reserve have been approached for comments regarding the report.