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Has The Federal Reserve Been Audited? Some Say Yes, Some Say No. Which Is It?

Submitted by nelsonwinters on Sat, 03/14/2009 - 16:40
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Well my first impression based on listening to Ron Paul was that the Federal Reserve had never been audited and that congress didn't have the authority to audit the Federal Reserve.

Then I heard from various places that the Fed has been audited:

http://market-ticker.denninger.net/archives/2009/02/07.html

http://www.geocities.com/CapitolHill/Senate/3616/flaherty6.html

So then I was confused. Well I was taking a look at HR 1207: and it referenced Subsection (b) of section 714 of title 31, United States Code:

http://www4.law.cornell.edu/uscode/uscode31/usc_sec_31_00000...

Finally, it looks like this is the answer I was looking for:

Under regulations of the Comptroller General, the Comptroller General shall audit an agency, but may carry out an onsite examination of an open insured bank or bank holding company only if the appropriate agency has consented in writing.

Audits of the Federal Reserve Board and Federal reserve banks may not include - (1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization; (2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations; (3) transactions made under the direction of the Federal Open Market Committee; or (4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)-(3) of this subsection. (c)(1) Except as provided in this subsection, an officer or employee of the General Accounting Office may not disclose information identifying an open bank, an open bank holding company, or a customer of an open or closed bank or bank holding company.

So basically, although audits are permitted, they have to get permission first and are not allowed to looked into many of the Fed's key activities.

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