Federal Reserve: Views on Proposed Expanded Access Authority for GAO

Pursuant to a congressional request, GAO discussed proposed legislation which would expand its authority and access in connection with Federal Reserve System (FRS) audits. GAO noted that: (1) its pre-1976 FRS audits were limited mainly to audits of fiscal agent functions FRS banks performed for the Department of the Treasury; (2) 1978 legislation significantly expanded its access to FRS and other bank regulatory agencies, but limited GAO access to information related to foreign transactions, monetary policy, and Federal Open Market Committee (FOMC) operations; (3) it has not experienced significant problems in cooperating with FRS; (4) although statutory limits posed access problems in GAO studies of the effects of monetary policy on housing and other parts of the economy, an information leak regarding FOMC deliberations, and FRS banks' Treasury securities accounting systems, GAO found reasonable ways to satisfy its information requirements; (5) the proposed legislation would remove the constraints on GAO access concerning monetary policy and FOMC deliberations and would facilitate GAO ability to audit banks' financial transactions; and (6) the proposed legislation should include provisions to protect FRS from undue interference.