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| Science Forum Index » Economy Forum » Auditing of the Federal Reserve |
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| William F Hummel |
 Posted: Thu Jan 05, 2006 1:09 pm |
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Copied from http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#9
Are the Federal Reserve System and Reserve Banks ever audited?
The Board of Governors, the Federal Reserve Banks, and the Federal
Reserve System as a whole are all subject to several levels of audit
and review. Under the Federal Banking Agency Audit Act (enacted in
1978 as Public Law 95-320), which authorizes the Comptroller General
of the United States to audit the Federal Reserve System, the General
Accounting Office (GAO) has conducted numerous reviews of Federal
Reserve activities. In addition, the Board's Office of Inspector
General (OIG) audits and investigates Board programs and operations as
well as those Board functions delegated to the Reserve Banks.
Completed and active GAO reviews and completed OIG audits, reviews,
and assessments are listed in the Board’s Annual Report (before 2002,
the reviews were listed in the Board's Annual Report: Budget Review).
The Board's financial statements, and its compliance with laws and
regulations affecting those statements, are audited annually by an
outside auditor retained by the OIG. The financial statements of the
Reserve Banks are also audited annually by an independent outside
auditor. In addition, the Reserve Banks are subject to annual
examination by the Board. The Board's financial statements and the
combined financial statements for the Reserve Banks are published in
the Board's Annual Report.
[The claim that the Fed is unaudited is pure fiction,] |
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| Lantern |
| Posted: Thu Jan 05, 2006 4:35 pm |
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Hummel wrote:
"The claim that the Fed is unaudited is pure fiction,"
Not exactly. Monetary policy is exempt from audit by the Government
Accounting Office. ( Ref. A FED publication entitled, "Federal Reserve
System Purposes and Functions.". My copy is dated 1994, maybe this has
changed. I hope so). Also, the publication says also excluded are
'certain functions such as transactions with foreign central banks and
open market operations' ...(a helluva exclusion IMHO).
One more detail, the OIG (Office of the Inspector General), is not the
U.S. Gov "Inspector General" but rather the name used in the FED for
their own OIG. If true, this internal audit of the FED of itself is not
really an objective, independent audit.For example, audit results will
not be open, nor corrective actions.
I post this not to be a wise-guy, smart ass but rather to try to alert
you to looking at the FED more closely. |
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| William F Hummel |
| Posted: Thu Jan 05, 2006 4:49 pm |
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On 5 Jan 2006 13:35:14 -0800, "Lantern" <lantern@nethere.com> wrote:
[quote:04bff0797d]Hummel wrote:
"The claim that the Fed is unaudited is pure fiction,"
Not exactly. Monetary policy is exempt from audit by the Government
Accounting Office. ( Ref. A FED publication entitled, "Federal Reserve
System Purposes and Functions.". My copy is dated 1994, maybe this has
changed. I hope so). Also, the publication says also excluded are
'certain functions such as transactions with foreign central banks and
open market operations' ...(a helluva exclusion IMHO).
One more detail, the OIG (Office of the Inspector General), is not the
U.S. Gov "Inspector General" but rather the name used in the FED for
their own OIG. If true, this internal audit of the FED of itself is not
really an objective, independent audit.For example, audit results will
not be open, nor corrective actions.
I post this not to be a wise-guy, smart ass but rather to try to alert
you to looking at the FED more closely.
[/quote:04bff0797d]
I am aware of the exceptions. They are mandated by law because they
would provide private parties a peak into very privileged information
which has nothing to do with illegal activity. Individuals running
the Fed have nothing to gain themselves by committing illegal acts and
are not going to jeopardize their careers or risk felony indictments.
There are too many watchdogs. You need to get over your seemingly
boundless suspicions about the Fed. |
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| Lantern |
| Posted: Fri Jan 06, 2006 5:56 pm |
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Hummel wrote:
[quote:270266ea80]You need to get over your seemingly
boundless suspicions about the Fed.>> The exceptions are ok with you?[/quote:270266ea80]
Even exempting the FOMC from audit? Are you sure there is a real
secrecy danger with an audit? |
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| William F Hummel |
| Posted: Sat Jan 07, 2006 12:16 pm |
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On 6 Jan 2006 14:56:35 -0800, "Lantern" <lantern@nethere.com> wrote:
[quote:31b18c4fe8]Hummel wrote:
You need to get over your seemingly boundless suspicions about the Fed.
Even exempting the FOMC from audit?
[/quote:31b18c4fe8]
How would you audit the FOMC? The Federal Open Market Committee
consists of seven Fed governors and five Fed bank officials who meet
about eight times a year to decide on what instructions to give the
Open Market Desk of the Federal Reserve Bank of New York. That desk
then performs open market operations as needed to meet the directive.
Committee members don't have keys to the gold vault, they simply set
monetary policy under statutory authority. Their deliberations are
private until sometime after their decisions are rendered.
Auditing basically involves verifying that the assets and liabilities
exist as reported, and that there are no unexplained components of the
balance sheet. |
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