Information on Selected Aspects of Federal Reserve System Expenditures

GGD-82-33: Published: Feb 12, 1982. Publicly Released: Feb 17, 1982.

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In response to a congressional request, GAO reviewed Federal Reserve System expenditures in 1980 and 1981. Specifically, GAO examined the status of the Federal Reserve's efforts to price float and the transportation of coin and currency; the cost and nature of the research conducted by the Federal Reserve System; the salaries and benefits of employees of the Federal Reserve System relative to those of civil service employees; and the expenditures, by object class, of each Federal Reserve bank.

The Monetary Control Act of 1980 required the Federal Reserve to begin pricing its payment collection services and float together with other services by September 1981. Fee schedules have been adopted for transportation services to supply coin and currency to banks and thrift institutions. However, the Federal Reserve has yet to commit itself to a date for pricing float although specific steps have been taken to reduce the level of float. The primary objective of research undertaken by the Federal Reserve is to support its monetary policy and regulatory responsibilities with data and reports on the implications of policy and regulatory actions. In 1980, the Federal Reserve System spent $46 million, or 5.4 percent of its total expenditures, on research and related activities. The first three quarters of 1981 showed a slight increase to 5.7 percent of total expenditures for research activities. GAO reported that the salaries of Federal Reserve Board employees are comparable to those of civil service employees in Washington, D.C., and, with a few exceptions, the benefits package is nearly identical to the civil service plan. However, each bank sets its own salary structure, and the benefits available to Federal Reserve Bank employees are quite different from those provided by the Board and civil service system. Personnel expenses are the largest bank expenditures, constituting from 51 to 61 percent of each bank's total expenses. Total Federal Reserve Bank expenditures for 1980 and the first three quarters of 1981 were $791 and $664 million, respectively.

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