Budgets: Chapter 2. Board of Governors

The Board of Governors operates under a two-year budget. The budget for 2008-09 was approved in December 2007 and subsequently amended in April 2009.

2008-09 Budget

Board of Governors

The Board's approved operating budget for 2008-09 was originally set at $706.3 million--$526.6 million (74.6 percent) for salaries and benefits and the remaining $179.7 million for goods and services (table 2.1; also see appendix C). The Board's approved capital budget for 2008-09 was $47.8 million, representing funds to be used primarily to replace or upgrade computing systems, renovate aging facilities, and expand Office space to accommodate workforce growth.

Table 2.1 Operating Expenses and Capital Expenditures of the Board of Governors, 2006-2009
Millions of dollars, except as noted
Operational area or Office of Inspector General	2006-07 (budgeted)	2006-07 (actual)	2008-09 (budgeted)	2008 (actual)	2008 actual expenses as a percent of the 2008-09 budget
Monetary and economic policy	143.1	137.9	169.1	78.1	46.2
Supervisory, regulatory, and legal services	206.4	200.5	232.0	117.1	50.5
Federal Reserve System policy direction	55.6	55.9	66.3	31.0	46.7
Support and security services	195.4	198.8	236.9	119.6	50.5
Extraordinary items	9.0	8.3	2.0	0.1	6.3
Total, Board operations	609.5	601.4	706.3	345.9	49.0
Total, capital¹	31.4	24.7	47.8	8.9	18.6
Office of Inspector General	10.2	9.5	12.7	5.3	42.1

Note: Components may not sum to totals and may not yield percentages shown because of rounding.

1. Includes Office of Inspector General. Return to table

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In 2009, $30.1 million, or 4.3 percent, was added to the Board's operating budget, bringing the two-year budget to $736.4 million. The increase in operating funds was driven by the extraordinary demands put on Board staff, Board operations, and technology support related to the financial crisis. Demands for information and technology and general services support have increased in order to provide real-time analysis and make changes to reports frequently based on new or revised regulatory and lending practices. There have been no changes to the Board's capital budget.

Office of Inspector General

In keeping with its statutory independence, the Office of Inspector General (OIG) prepares its proposed budget apart from the Board's budget and presents it directly to the Chairman of the Board of Governors for Board members' consideration. The OIG's 2008-09 operating budget was $12.7 million. During 2009, an additional $1.3 million was added, bringing the two-year budget to $14.0 million. The capital budget increased by $11,000.

Authorized Positions

At the beginning of the 2008-09 budget cycle, the Board had 2,041 authorized positions (table 2.2). The number of authorized positions for the OIG was 37.

To meet increased workload demands, the Board added 39 positions in 2008. In 2009, the Board added another 63 positions, bringing the total authorized positions to 2,143. The OIG's total authorized positions remained at 37 during 2008, but 8 positions were added during 2009.

Table 2.2 Positions Authorized at the Board of Governors, 2006-2009
Operational area or Office of Inspector General	Position count
Operational area or Office of Inspector General	2006-07 (initial)	2006-07 (ending)	2008-09 (initial)	2008 (ending)
Monetary and economic policy	466	467	481	484
Supervisory, regulatory, and legal services	567	577	576	585
Federal Reserve System policy direction	173	176	179	179
Support and security services¹	770	805	805	832
Extraordinary items	…	…	…	…
Total, Board operations	1,976	2,025	2,041	2,080
Office of Inspector General	36	36	37	37

1. Includes summer interns and youth positions and positions that support the Federal Financial Institutions Examination Council for processing data collected under the Home Mortgage Disclosure Act and the Community Reinvestment Act. Return to table

… Not applicable. Return to table

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Areas of Risk

Despite careful planning, future developments could necessitate resources beyond those currently approved. Examples of such developments include:

significant changes in or shocks to the economy or financial system that create a material increase in workload,
heavier workload required by laws, decisions to expand or modify central bank operations, or compliance requirements,
pressure in key areas requiring additional salary or benefit packages in order for the Board to remain competitive, and
an unforeseen external event requiring additional security or contingency enhancements.

2008 Budget Performance

Board of Governors

The Board's 2008 operating expenses totaled $345.9 million. Personnel-related expenses totaled $263.4 million, or 2.1 percent over the $258.0 million budgeted for the first half of the biennium. Expenses for goods and services totaled $82.5 million, or 6.4 percent below the $88.1 million budgeted. The underage was due to lower-than expected expenses for contractual professional services, repairs, and furniture and equipment. Capital expenditures for 2008 totaled $8.9 million, or 62.0 percent below the $23.4 million budgeted, primarily because of changes in the timing of several capital projects.

Office of Inspector General

OIG expenses for 2008 totaled $5.3 million, compared with a budgeted amount of $6.2 million.

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