Federal Reserve System Budgets
The Federal Reserve Board of Governors and the Federal Reserve Banks prepare annual budgets as part of their efforts to ensure appropriate stewardship and accountability.1 This section presents information on the 2023 budget performance of the Board and Reserve Banks and on their 2024 budgets, budgeting processes, and trends in expenses and employment. This section also presents information on the costs of new currency.
System Budgets Overview
Tables D.1 and D.2 summarize the Federal Reserve Board of Governors' and Federal Reserve Banks' 2023 budgeted, 2023 actual, and 2024 budgeted operating expenses and employment.2
Table D.1. Total operating expenses of the Federal Reserve System, net of receipts and claims for reimbursement, 2023–24
Millions of dollars, except as noted
| Item | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Board1 | 989.6 | 994.1 | 4.5 | 0.5 | 1,044.1 | 50.0 | 5.0 |
| Office of Inspector General2 | 37.9 | 34.6 | –3.3 | –8.6 | 39.0 | 4.3 | 12.5 |
| Reserve Banks3 | 5,646.2 | 5,648.3 | 2.1 | 0.0 | 6,053.2 | 404.9 | 7.2 |
| Currency4 | 1,066.5 | 1,047.6 | –18.9 | –1.8 | 1,368.6 | 321.0 | 30.6 |
| Total System operating expenses | 7,740.1 | 7,724.5 | –15.6 | –0.2 | 8,504.9 | 780.4 | 10.1 |
| Revenue from priced services | 495.8 | 507.3 | 11.5 | 2.3 | 501.4 | –5.9 | –1.2 |
| Claims for reimbursement5 | 787.9 | 757.6 | –30.3 | –3.8 | 879.8 | 122.2 | 16.1 |
| Revenue and claims for reimbursement6 |
1,283.7 | 1,264.9 | –18.8 | –1.5 | 1,381.2 | 116.3 | 9.2 |
| Total System operating expenses, net of revenue and claims for reimbursement | 6,456.4 | 6,459.6 | 3.2 | 0.0 | 7,123.7 | 664.1 | 10.3 |
Note: Here and in subsequent tables, components may not sum to totals and may not yield percentages shown because of rounding.
1. In December 2023, the Board approved a 2023 budget authority of $989.6 million, an increase from the previously approved budget of $960.8 million. Return to table
2. Reflects the total operating budget net of expected earned income from the Consumer Financial Protection Bureau (CFPB). For 2023, the Office of Inspector General (OIG) conducted more work related to the CFPB than planned, which drove the variance. Return to table
3. Excludes Reserve Bank assessments by the Board of Governors for costs related to currency and the operations of the Board of Governors, OIG, and CFPB. Return to table
4. In the previous report, the 2022 and 2023 currency values reflected only single-cycle operating expenses. In the current report, 2023 and 2024 currency values reflect the sum of single-cycle and multicycle project costs. However, the Bureau of Engraving and Printing's single-cycle and multicycle project budgets are tracked separately, as shown in tables D.13 and D.14, respectively. Return to table
5. Reimbursable claims include the expenses of fiscal agency. In 2023 actual, the fiscal agency allocated portion of the pension is also included but is not included for the budget. The fiscal agency budgeted pension expense is $79.8 million in 2023 and $47.4 million in 2024. Return to table
6. Excludes annual assessments for the supervision of large financial companies pursuant to Regulation TT, which are not recognized as revenue or used to fund Board expenses. (See section 4, "Supervision and Regulation," for more information.) Includes total operating expenses of the National Information Technology (NIT) support function. In past years, NIT was referred to as the Federal Reserve Information Technology (FRIT) office. In 2023, the Office of Employee Benefits was consolidated into the Federal Reserve Bank of Atlanta. Return to table
Table D.2. Employment in the Federal Reserve System, 2023–24
| Item | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Board1 | 3,101 | 3,116 | 16 | 0.5 | 3,148 | 32 | 1.0 |
| Office of Inspector General | 136 | 135 | –1 | –0.6 | 143 | 8 | 5.8 |
| Reserve Banks2 | 20,733 | 20,680 | –53 | -0.3 | 21,238 | 558 | 2.7 |
| Currency | 22 | 19 | –3 | –13.6 | 24 | 5 | 26.3 |
| Total System employment | 23,991 | 23,950 | –41 | –0.2 | 24,553 | 603 | 2.5 |
Note: Employment numbers presented are full-time equivalents (FTE). FTE represent an employee's scheduled hours divided by the employer's hours for a full-time workweek.
1. The 2023 budget amount was updated to reflect budget authority approved by the Board in December 2023. Return to table
2. Includes employment of NIT support function. In 2023, the Office of Employee Benefits (OEB) was consolidated into the Federal Reserve Bank of Atlanta. In past years, NIT was referred to as the Federal Reserve Information Technology (FRIT) office. Return to table
2023 Budget Performance
In carrying out its responsibilities in 2023, the Federal Reserve System incurred $6,459.6 million in net expenses. Total System operating expenses of $7,724.5 million were offset by $1,264.9 million in revenue from priced services and claims for reimbursement. Total 2023 System operating expenses, net of revenue and reimbursements, were $3.2 million, or 0.05 percent, more than the amount budgeted for 2023.
2024 Operating Expense Budget
Budgeted 2024 System operating expenses of $7,123.7 million, net of revenue and reimbursements, are $664.1 million, or 10.3 percent, higher than 2023 actual expenses. The Reserve Bank budgets comprise almost three-quarters of the System budget (figure D.1.). Budgeted 2024 revenue from priced services is 1.2 percent lower than 2023 actual revenue.
Figure D.1. Distribution of budgeted expenses of the Federal Reserve System, 2024
Accessible Version | Return to text
OIG: Office of Inspector General.
Trends in Expenses and Employment
From the actual 2014 amount to the budgeted 2024 amount, the total operating expenses of the Federal Reserve System have increased an average of 5.3 percent annually (figure D.2.), which is slightly higher than the 10-year growth rate between 2013 and 2023. The total rate of growth in Federal Reserve System expenses reflects investments in technology initiatives, payment infrastructure modernization efforts, the next-generation currency-processing program (NextGen), and resources to support the supervision portfolio and other national strategic initiatives (figure D.3.).3
Figure D.2. Total expenses of the Federal Reserve System, 2014–24
Accessible Version | Return to text
Note: For 2024, budgeted. Includes expenses of the OIG.
1. Calculated with the GDP price deflator.
Figure D.3. Employment in the Federal Reserve System, 2014–24
Accessible Version | Return to text
Note: For 2024, budgeted. From 2014 to 2018, employment numbers presented include position counts for the Board and the OIG and average number of personnel (ANP) for the Reserve Banks. From 2019 to 2020, employment numbers for all entities are represented in ANP. For 2021 to 2022, employment numbers presented include ANP for the Board and OIG and headcount for the Reserve Banks. For 2023 and 2024, employment numbers for all entities are represented by full-time employment.
Expense growth in the monetary policy area represents continued investment in regional economic research, and resources to support effective market operations and monitoring activities.
Treasury services expenses have increased to meet expanding scope and evolving needs, including business and technology modernization of payment services, financing and securities services, and accounting and reporting services, as well as significant investment in infrastructure and technology services.
Expenses for services to financial institutions continue to increase as a result of the NextGen program. More recently, increased demand for cash and social distancing protocols related to the COVID-19 pandemic resulted in higher personnel costs for cash operations and other related expenses for essential on-site staff. Growth in services to financial institutions and the public is also attributable to the addition of resources in support of the credit and liquidity facilities created in response to the COVID-19 pandemic.
Supervision growth has moderated over the past 10 years. Growth driven by changes in the state member bank portfolio, the buildout of the cybersecurity supervision program, and support for other national strategic initiatives was partially offset by adjustments to supervisory mandates from the Economic Growth, Regulatory Reform and Consumer Protection Act, the identification and realization of operational efficiencies, and the prioritization of resources toward higher-risk activities and emerging risks. In particular, resources were temporarily shifted from supervision in 2020 and 2021 to support the credit and liquidity facilities responding to the COVID-19 pandemic. Most recently, resource additions have been added to align with supervisory portfolio growth, increased complexity of institutions, and other strategic initiatives impacting the banking industry.
Growth in fee-based services is primarily for investments in the payment infrastructure modernization efforts, including the FedNowSM Service initiative, and investments associated with multiyear technology initiatives to modernize processing platforms for Fedwire and automated clearinghouse (ACH).4
2024 Capital Budgets
The capital budgets for the Board and Reserve Banks total $389.9 million and $913.8 million, respectively.5 As in previous years, the 2024 capital budgets include funding for projects that support the strategic direction outlined by the Board, System leadership, and each Reserve Bank. These strategic goals emphasize investments that continue to improve operational efficiencies, enhance services to Bank customers, and ensure a safe and productive work environment.
Board of Governors Budgets
Board of Governors
The Board's budget is based on the principles established by the Strategic Plan 2024–27 and provides funding to advance the plan's goals and objectives.6 This functional alignment helps ensure organizational resources are used to advance the Board's mission and provides a structure to fund strategic priorities over the four-year time horizon.
The Board's budget process is as follows:
- At the start of the budget process, the chief operating officer and chief financial officer meet with the Committee on Board Affairs (CBA) to recommend a specific growth target for the Board's operating budget. For 2024, the recommended growth target included known changes in the run-rate of the Board's ongoing operations. After endorsement by the CBA, Division of Financial Management (DFM) staff communicate the target to the Executive Committee, which comprises the directors of each division.
- To achieve the CBA's growth target, divisions allocate resources to their highest priorities and seek tradeoffs and efficiencies. Existing and new initiatives are evaluated, refined, and prioritized.
- DFM staff review initial budget requests submitted by divisions and collaborate with all divisions and functional areas to achieve the growth target.7
- The chief operating officer and chief financial officer subsequently brief the CBA on the budget submissions. Once the budget is finalized, the Administrative Governor submits the budget to the full Board for review and final approval.
- Throughout the year, DFM staff monitor expenses through financial forecasts which provide insight into budgetary pressures. Staff analyze budgetary variances and pressures and communicate the results to senior management.
Tables D.3, D.4, and D.5 summarize the Board's 2023 budgeted and actual expenses and its 2024 budgeted expenses by operating area; division, office, or special account; and account classification, respectively. Table D.6 summarizes the Board's 2023 budgeted and actual authorized positions and its budgeted positions for 2024. Each table includes a line item for the Office of Inspector General (OIG), which is discussed later in this section.
Table D.3. Operating expenses of the Board of Governors, by operating area, 2023–24
Millions of dollars, except as noted
| Item | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Monetary policy and financial stability1 | 419.9 | 418.0 | (1.9) | –0.5 | 445.7 | 27.7 | 6.6 |
| Supervision and regulation | 426.6 | 432.2 | 5.6 | 1.3 | 437.2 | 5.0 | 1.2 |
| Payment system and Reserve Bank oversight | 84.9 | 85.1 | 0.2 | 0.2 | 86.4 | 1.3 | 1.6 |
| Consumer protection and community development | 58.2 | 58.8 | 0.6 | 1.1 | 74.8 | 15.9 | 27.1 |
| Total, Board operations | 989.6 | 994.1 | 4.5 | 0.5 | 1,044.1 | 50.0 | 5.0 |
| Office of Inspector General | 37.9 | 34.6 | (3.3) | (8.6) | 39.0 | 4.3 | 12.5 |
Note: This table presents financial performance for the Board's operating areas, which align with the Reserve Banks. Figures reflect the implementation of a new cost accounting framework in July 2023, which may cause adjustments between operating areas. Payment system and Reserve Bank oversight is an operating area unique to the Board.
1. Includes the Survey of Consumer Finances. Return to table
Table D.4. Operating expenses of the Board of Governors, by division, office, or special account, 2023–24
Millions of dollars, except as noted
| Division, office, or special account | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Research and Statistics | 107.5 | 107.4 | -0.1 | (0.1) | 115.3 | 7.9 | 7.4 |
| International Finance | 44.3 | 44.3 | 0.0 | (0.1) | 47.3 | 3.0 | 6.8 |
| Monetary Affairs | 49.9 | 50.2 | 0.4 | 0.8 | 54.3 | 4.0 | 8.0 |
| Financial Stability | 20.4 | 20.4 | 0.1 | 0.4 | 22.6 | 2.1 | 10.4 |
| Supervision and Regulation | 132.5 | 131.2 | –1.3 | (1.0) | 140.7 | 9.5 | 7.2 |
| Consumer and Community Affairs | 40.5 | 40.2 | –0.3 | (0.6) | 43.3 | 3.1 | 7.6 |
| Reserve Bank Operations and Payment Systems |
52.0 | 51.4 | –0.6 | (1.2) | 55.3 | 4.0 | 7.7 |
| Board Members | 30.6 | 30.8 | 0.2 | 0.7 | 32.5 | 1.6 | 5.3 |
| Secretary | 12.7 | 12.6 | –0.1 | (0.6) | 13.5 | 0.9 | 7.1 |
| Legal | 39.0 | 38.8 | –0.1 | (0.3) | 42.6 | 3.8 | 9.8 |
| Chief Operating Officer | 15.3 | 15.3 | 0.0 | 0.3 | 16.7 | 1.4 | 8.9 |
| Financial Management | 16.4 | 16.5 | 0.1 | 0.7 | 17.8 | 1.4 | 8.2 |
| Information Technology | 158.2 | 158.0 | –0.2 | (0.1) | 165.9 | 7.9 | 5.0 |
| Management | 190.2 | 191.1 | 1.0 | 0.5 | 200.4 | 9.3 | 4.8 |
| Centrally managed benefits1 | 33.4 | 35.4 | 2.0 | 6.1 | 32.0 | (3.5) | (9.8) |
| Extraordinary items | 65.1 | 70.2 | 5.1 | 7.8 | 66.9 | (3.3) | (4.7) |
| Savings and reallocations | (19.4) | (21.9) | –2.5 | 12.8 | (25.0) | (3.0) | 13.8 |
| Survey of Consumer Finances2 | 1.3 | 2.1 | 0.7 | 52.0 | 2.1 | 0.0 | 2.4 |
| Total, Board operations | 989.6 | 994.1 | 4.5 | 0.5 | 1,044.1 | 50.0 | 5.0 |
| Office of Inspector General | 37.9 | 34.6 | –3.3 | (8.6) | 39.0 | 4.3 | 12.5 |
1. Includes centrally managed Boardwide benefits programs, such as accrued annual leave, academic assistance, relocation, and retirement benefits, which fluctuate because of changes in actuarial assumptions and demographics. Return to table
2. The survey collects information about family incomes, net worth, balance sheet components, credit use, and other financial outcomes, and is conducted every three years. Return to table
Table D.5. Operating expenses of the Board of Governors, by account classification, 2023–24
Millions of dollars, except as noted
| Account classification | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Personnel services | |||||||
| Salaries | 565.3 | 567.6 | 2.2 | 0.4 | 607.6 | 40.0 | 7.1 |
| Outside agency help | 48.3 | 47.8 | –0.5 | –1.1 | 50.3 | 2.5 | 5.2 |
| Retirement, Insurance, and Benefits | 109.3 | 110.7 | 1.4 | 1.3 | 114.9 | 4.2 | 3.8 |
| Pension and Post-Retirement Benefits | 15.3 | 15.1 | –0.3 | –1.7 | 14.5 | –0.6 | –4.0 |
| Subtotal, personnel services | 738.2 | 741.1 | 2.9 | 0.4 | 787.2 | 46.1 | 6.2 |
| Goods and services | |||||||
| Contractual Services and Professional Fees | 66.7 | 65.7 | -1.0 | –1.5 | 54.3 | –11.5 | –17.4 |
| Rentals | 39.0 | 38.3 | -0.7 | –1.7 | 42.3 | 4.0 | 10.4 |
| Data, News, and Research | 23.1 | 24.1 | 0.9 | 3.9 | 28.5 | 4.4 | 18.3 |
| Software | 36.0 | 37.7 | 1.7 | 4.6 | 40.8 | 3.1 | 8.2 |
| Furniture, Equipment, Postage, and Supplies | 7.9 | 8.2 | 0.3 | 4.1 | 8.4 | 0.2 | 1.9 |
| Repairs and Maintenance | 12.2 | 12.4 | 0.2 | 1.7 | 13.5 | 1.1 | 8.6 |
| Utilities | 9.0 | 9.1 | 0.1 | 0.8 | 9.9 | 0.9 | 9.4 |
| Travel | 7.7 | 8.7 | 1.0 | 13.1 | 7.9 | -0.8 | –9.3 |
| Other Expenses | 20.7 | 19.2 | –1.5 | –7.5 | 22.0 | 2.8 | 14.6 |
| Depreciation/Amortization | 56.2 | 55.9 | –0.3 | –0.4 | 57.6 | 1.7 | 3.1 |
| Support and overhead allocations1 | -21.9 | -21.9 | 0.0 | 0.0 | -22.9 | –1.0 | 4.6 |
| Earned Revenue | –5.3 | –4.4 | 0.9 | –16.8 | –5.3 | –0.8 | 19.1 |
| Subtotal, goods and services | 251.4 | 253.0 | 1.6 | 0.6 | 256.9 | 4.0 | 1.6 |
| Total, Board operations | 989.6 | 994.1 | 4.5 | 0.5 | 1,044.1 | 50.0 | 5.0 |
| Office of Inspector General (OIG) | |||||||
| Personnel services | 33.0 | 33.5 | 0.5 | 1.7 | 36.2 | 2.7 | 8.0 |
| Goods and services2 | 21.1 | 20.6 | –0.5 | –2.5 | 22.8 | 2.2 | 10.9 |
| Subtotal, excluding operating income | 54.1 | 54.1 | 0.0 | 0.0 | 59.0 | 4.9 | 9.1 |
| Operating income3 | –16.2 | –19.5 | –3.3 | 20.1 | –20.1 | –0.6 | 3.0 |
| Total, OIG operations | 37.9 | 34.6 | –3.3 | –8.6 | 39.0 | 4.3 | 12.5 |
1. Includes the transfer of attributable support and overhead expenses from the Board operating budget to the OIG and Currency budgets. Return to table
2. Includes Board support and overhead allocations to the OIG. Return to table
3. Includes earned income from the CFPB. Return to table
Table D.6. Positions authorized by the Board of Governors, by division, office, or special account, 2023–24
| Division, office, or special account | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Research and Statistics | 364 | 366 | 2 | 0.5 | 368 | 2 | 0.5 |
| International Finance | 168 | 168 | 0 | 0.0 | 170 | 2 | 1.2 |
| Monetary Affairs | 186 | 188 | 2 | 1.1 | 190 | 2 | 1.1 |
| Financial Stability | 81 | 81 | 0 | 0.0 | 83 | 2 | 2.5 |
| Supervision and Regulation | 497 | 497 | 0 | 0.0 | 499 | 2 | 0.4 |
| Consumer and Community Affairs | 138 | 138 | 0 | 0.0 | 139 | 1 | 0.7 |
| Reserve Bank Operations and Payment Systems |
190 | 190 | 0 | 0.0 | 191 | 1 | 0.5 |
| Board Members | 124 | 126 | 2 | 1.6 | 127 | 1 | 0.8 |
| Secretary | 56 | 54 | –2 | –3.6 | 55 | 1 | 1.9 |
| Legal | 136 | 139 | 3 | 2.2 | 139 | 0 | 0.0 |
| Chief Operating Officer | 64 | 64 | 0 | 0.0 | 64 | 0 | 0.0 |
| Financial Management | 72 | 72 | 0 | 0.0 | 72 | 0 | 0.0 |
| Information Technology | 419 | 419 | 0 | 0.0 | 420 | 1 | 0.2 |
| Management | 485 | 485 | 0 | 0.0 | 485 | 0 | 0.0 |
| Extraordinary items1 | 10 | 3 | –7 | –70.0 | 5 | 2 | 66.7 |
| Total, Board operations | 2,990 | 2,990 | 0 | 0.0 | 3,007 | 17 | 0.6 |
| Office of Inspector General | 142 | 142 | 0 | 0.0 | 152 | 10 | 7.0 |
| Currency | 22 | 22 | 0 | 0.0 | 24 | 2 | 9.1 |
Note: Budget represents authorized position count at the beginning of the year, and actual represents authorized position count at year-end.
1. Includes the centralized position pool used for strategic areas of growth. Return to table
2023 Budget Performance
The 2023 Board operating budget included measured risks to confront perennial underruns; however, by yearend, these risks materialized. In December 2023, the Board approved a 2023 budget authority of $989.6 million. Total expenses for Board operations were $994.1 million, which were $4.5 million, or 0.5 percent, higher than the budget authority. Board members were briefed on final 2023 performance.
The Board's 2023 single-year capital spending was $16.3 million, less than budgeted by $5.4 million, or 25.0 percent, driven by lower spending on lifecycle replacements of furniture and equipment. Multiyear capital projects spending in 2023 was higher than budgeted by $92.1 million, or 60.6 percent, driven by early construction activities for building improvement projects. Although 2023 expenditures for multiyear capital projects were higher than budgeted, multiyear projects are still projected to be within their total project budgets. Table D.7 summarizes the Board's budgeted and actual capital expenditures for 2023 and 2024.
Table D.7. Capital expenditures of the Board of Governors, by capital type, 2023–24
| Item | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Board | |||||||
| Single-year capital expenditures | 21.7 | 16.3 | –5.4 | –25.0 | 25.1 | 8.8 | 54.1 |
| Multiyear capital expenditures | 151.8 | 243.9 | 92.1 | 60.6 | 364.3 | 120.4 | 49.4 |
| Total capital expenditures | 173.5 | 260.2 | 86.6 | 49.9 | 389.4 | 129.2 | 49.7 |
| Office of Inspector General (OIG) | |||||||
| Single-year capital expenditures | 0.2 | 0.1 | -0.1 | –54.6 | 0.5 | 0.4 | 395.7 |
| Multiyear capital expenditures | 0.0 | 0.0 | 0.0 | n/a | 0.0 | 0.0 | n/a |
| Total capital expenditures | 0.2 | 0.1 | –0.1 | -54.6 | 0.5 | 0.4 | 395.7 |
| Board and OIG total capital expenditures | 173.7 | 260.3 | 86.5 | 49.8 | 389.9 | 129.6 | 49.8 |
Note: The amount reported for the multiyear capital budget represents the expected expenditure for the budget year.
n/a Not applicable.
2024 Operating Expense Budget
The 2024 budget for Board operations is $1,044.1 million, which is $50.0 million, or 5.0 percent, higher than 2023 actual expenses. Staff formulated the operating budget to advance the organization's priorities across five goal areas to maintain the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems.
The 2024 budget includes funding for the Board's compensation and benefit programs, moderate employment growth as vacancies are filled to meet critical needs, contractors to support strategic projects, and continuing existing goods and services. New initiatives will be funded through offsets from existing operations and projects.
Authorized positions for 2024 are 3,007, an increase of 17 positions from the 2023 authorized number.
2024 Capital Budgets
The Board's 2024 single-year capital budget is $25.1 million, which is $8.8 million, or 54.1 percent, higher than 2023 actual capital expenditures. The growth is driven by the deferral of some purchases from 2023 to 2024. The budget includes routine replacements of equipment, software, and building components.
The Board's multiyear capital budget is driven by building improvement projects. Expected capital expenditures in 2024 total $364.3 million and reflect the Board's commitment to provide a secure, modern environment that meets the needs of the Board's workforce and leverages opportunities to increase collaboration, efficiency, productivity, and sustainability. Table D.7 summarizes the Board's budgeted and actual capital expenditures for 2023 and 2024.
Office of Inspector General
The budget for the Board's OIG is grounded in the goals established in its strategic plan.8 The goals are to deliver results that promote agency excellence; promote a diverse, skilled, and engaged workforce and foster an inclusive, collaborative environment; optimize external stakeholder engagement; and advance organizational effectiveness and model a culture of continuous improvement.
In keeping with its statutory independence, the OIG prepares its proposed budget separate and apart from the Board's budget. The OIG presents its budget directly to the Board for approval.
2023 Budget Performance
Total expenses for OIG operations, excluding operating income, were $54.1 million, which were in line with the approved budget.
Operating income was $3.3 million, or 20.1 percent, higher than the approved budget amount. The OIG conducted more work related to the Consumer Financial Protection Bureau (CFPB) than planned; in addition, the office's increased oversight and investigative responsibilities continue to subside related to the Board's programs created in response to the COVID-19 pandemic. Including operating income from the CFPB, total expenses for OIG operations were $34.6 million in 2023.
The OIG's single-year capital spending was $0.1 million, less than budgeted by $0.1 million or 54.6 percent. Table D.5 summarizes the OIG's 2023 budgeted and actual expenses and table D.7 summarizes the OIG's budgeted and actual capital expenditures for 2023 and 2024.
2024 Operating Expense Budget
The 2024 budget for OIG operations, excluding operating income, is $59.0 million, which is $4.9 million, or 9.1 percent, higher than 2023 actual expenses. The increase is driven by higher authorized staffing levels, funding for compensation and benefit programs, and a lower budgeted vacancy rate to reflect recent employment trend data. Including operating income from the CFPB, the 2024 budget for OIG operations is $39.0 million.
2024 Capital Budget
The OIG's single-year capital budget is $0.5 million, which is $0.4 million higher than 2023 actual capital expenditures. The budget includes existing vehicle replacements, equipment purchases, and leasehold improvements for the San Francisco regional office. Table D.5 summarizes the OIG's 2024 budgeted expenses, and table D.7 summarizes the OIG's budgeted and actual capital expenditures for 2024.
The OIG has 152 authorized positions for 2024, an increase of 10 from the 2023 authorized number.
Federal Reserve Banks Budgets
Each Reserve Bank establishes operating goals for the coming year that are aligned with the System's key strategic objectives, devises strategies for attaining those goals, estimates required resources, and monitors results. The Reserve Banks structure their budgets around specific functional areas reflecting the core responsibilities of the Federal Reserve:
- contributing to the formulation of monetary policy and enhancing monetary policy implementation to become more effective, flexible, and resilient
- promoting financial stability through effective monitoring, analysis, and policy development
- promoting safety and soundness of financial institutions through effective supervision
- leading efforts to enhance the security, resiliency, functionality, and efficiency of services provided to financial institutions, to the U.S. Treasury as its fiscal agent, and to the public
The Reserve Bank budget process is as follows:
- The Conference of Presidents, working closely with the Conference of First Vice Presidents (CFVP), reorganized and simplified its committee structure establishing five umbrella committees responsible for major operational areas and functional areas.9 The leader of each umbrella committee, as well as the chair and vice chair of the CFVP, sits on the Committee on Spend Stewardship (CSS), which is charged by the COP with aligning the budget with strategic priorities at the System level.
- The CSS defines, in close consultation with the Board's Committee on Federal Reserve Bank Affairs (BAC), key strategic objectives for the System. Considering longer-term environmental trends and historical growth rates of expense, these governance bodies articulate an aggregate System-level growth expectation for the budget year.
- With guidance from the CSS, the 12 Reserve Banks develop budgets that reflect the strategic priorities, relying heavily on framing and making appropriate tradeoffs. These budgets are reviewed by each Reserve Bank's senior leadership and respective board of directors.
- The Reserve Banks submit for Board review preliminary budget information, including documentation to support the budget request.
- Board staff analyzes these budgets both individually and, in the aggregate, and then provide its recommendations to the BAC.
- Expenses associated with services provided to the Treasury require authorization from the Bureau of the Fiscal Service.
- The BAC reviews the Banks' budgets.
- The Reserve Banks make any needed changes, and the BAC chair submits the revised budgets to Board members for review and final action.
- Throughout the year, Reserve Bank and Board staffs monitor actual performance and compare it with approved budgets and forecasts.
In addition to the budget approval process, the Reserve Banks must submit proposals for certain capital expenditures to the Board for further review and approval.
Tables D.8, D.9, and D.10 summarize the Reserve Banks' 2023 budgeted and actual expenses and 2024 budgeted expenses by Reserve Bank, functional area, and account classification.10 Table D.11 shows the Reserve Banks' budgeted and actual employment for 2023 and budgeted employment for 2024. In addition, table D.12 shows the Reserve Banks' budgeted and actual capital expenditures for 2023 and budgeted capital for 2024.
Table D.8. Operating expenses of the Federal Reserve Banks, by District, 2023–24
Millions of dollars, except as noted
| District | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Boston | 407.7 | 410.7 | 2.97 | 0.7 | 438.2 | 27.5 | 6.7 |
| New York | 1,291.3 | 1,290.3 | –1.03 | –0.1 | 1,364.1 | 73.8 | 5.7 |
| Philadelphia | 232.8 | 235.1 | 2.28 | 1.0 | 243.9 | 8.8 | 3.8 |
| Cleveland | 304.2 | 303.1 | –1.09 | –0.4 | 330.0 | 26.9 | 8.9 |
| Richmond | 394.2 | 390.8 | –3.42 | –0.9 | 418.4 | 27.6 | 7.1 |
| Atlanta | 476.6 | 485 | 8.39 | 1.8 | 530.4 | 45.4 | 9.4 |
| Chicago | 540.1 | 527.3 | –12.79 | –2.4 | 557.6 | 30.3 | 5.7 |
| St. Louis | 427.9 | 424.1 | –3.84 | –0.9 | 491.6 | 67.5 | 15.9 |
| Minneapolis | 257.1 | 265.4 | 8.27 | 3.2 | 302.2 | 36.8 | 13.9 |
| Kansas City | 487.9 | 486.3 | –1.61 | –0.3 | 484.9 | –1.4 | –0.3 |
| Dallas | 302.2 | 307.7 | 5.54 | 1.8 | 334.5 | 26.8 | 8.7 |
| San Francisco | 524.1 | 522.5 | –1.57 | –0.3 | 557.2 | 34.7 | 6.6 |
| Total Reserve Bank operating expenses | 5,646.2 | 5,648.3 | 2.1 | 0.0 | 6,053.2 | 404.9 | 7.2 |
Note: Includes expenses of the NIT support function and the OEB and reflects allocations for all indirect services. Excludes Reserve Bank capital expenditures as well as assessments by the Board of Governors for costs related to currency and the operations of the Board of Governors and the Consumer Financial Protection Bureau. In past years, National IT was referred to as the Federal Reserve Information Technology office (FRIT).
Table D.9. Operating expenses of the Federal Reserve Banks, by operating area, 2023–24
Millions of dollars, except as noted
| Operating area | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Monetary and economic policy | 943.2 | 945.0 | 1.8 | 0.2 | 928.8 | −16.2 | −1.7 |
| Services to the U.S. Treasury and other government agencies | 721.3 | 701.9 | −19.4 | −2.7 | 819.8 | 117.9 | 16.8 |
| Services to financial institutions and the public1 | 1,519.8 | 1,526.3 | 6.5 | 0.4 | 1,744.7 | 218.4 | 14.3 |
| Supervision and regulation | 1,722.1 | 1,734.2 | 12.1 | 0.7 | 1,784.5 | 50.3 | 2.9 |
| Fee-based services to financial institutions2 | 739.9 | 740.9 | 1.0 | 0.1 | 775.2 | 34.3 | 4.6 |
| Total Reserve Bank operating expenses3 | 5,648.2 | 5,648.3 | 2.1 | 0.0 | 6,053.2 | 404.9 | 7.2 |
1. Services to financial institutions and the public includes cash services. Return to table
2. Includes operating expenses related to development of the FedNow Service. Return to table
3. Operating expenses exclude pension costs, reimbursements, and operating expense of the Board of Governors (see table D.4). Return to table
Table D.10. Operating expenses of the Federal Reserve Banks, by account classification, 2023–24
Millions of dollars, except as noted
| Account classification |
2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Salaries and other benefits1 | 4,195.4 | 4,230.2 | 34.8 | 0.8 | 4,436.6 | 206.5 | 4.9 |
| Building | 301.8 | 284.5 | −17.2 | −5.7 | 313.4 | 28.9 | 10.1 |
| Software costs | 498.7 | 493.1 | −5.6 | −1.1 | 579.6 | 86.5 | 17.5 |
| Equipment | 231.2 | 250.3 | 19.1 | 8.3 | 267.3 | 17.0 | 6.8 |
| Recoveries | −236.2 | −233.3 | 2.9 | −1.2 | −241.9 | −8.6 | 3.7 |
| Expenses capitalized | −164.8 | −159.2 | 5.6 | −0.4 | −202.0 | −42.8 | 26.9 |
| All other2 | 820.2 | 782.7 | −37.5 | −4.6 | 900.1 | 117.4 | 15.0 |
| Total Reserve Bank operating expenses | 5,646.2 | 5,648.3 | 2.1 | 0.0 | 6,053.2 | 404.9 | 7.2 |
1. Includes salaries, other personnel expense, and retirement and other employment benefit expenses. It does not include pension expenses related to all the participants in the Retirement Plan for Employees of the Federal Reserve System and the Reserve Bank participants in the Benefit Equalization Plan and the Supplemental Retirement Plan for Select Officers of the Federal Reserve Banks. These expenses are recorded as a separate line item in the financial statements; see "Table G.9. Income and expenses of the Federal Reserve Banks, by Bank" in Appendix G, "Statistical Tables." Return to table
2. Includes fees, materials and supplies, travel, communications, and shipping. Return to table
Table D.11. Employment at the Federal Reserve Banks, by District, OEB and at NIT, 2023–24
| District | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Boston | 1,283 | 1,277 | −6 | −0.5 | 1,296 | 18 | 1.4 |
| New York | 2,981 | 2,958 | −23 | −0.8 | 3,073 | 116 | 3.9 |
| Philadelphia | 857 | 878 | 22 | 2.5 | 884 | 5 | 0.6 |
| Cleveland | 1,104 | 1,073 | −31 | −2.8 | 1,114 | 42 | 3.9 |
| Richmond | 1,547 | 1,555 | 8 | 0.5 | 1,617 | 62 | 4.0 |
| Atlanta | 1,715 | 1,752 | 37 | 2.1 | 1,780 | 28 | 1.6 |
| Chicago | 1,679 | 1,693 | 14 | 0.8 | 1,726 | 33 | 1.9 |
| St. Louis | 1,447 | 1,479 | 32 | 2.2 | 1,508 | 28 | 1.9 |
| Minneapolis | 1,066 | 1,112 | 46 | 4.3 | 1,147 | 34 | 3.1 |
| Kansas City | 2,132 | 2,055 | −77 | −3.6 | 2,072 | 18 | 0.9 |
| Dallas | 1,281 | 1,310 | 29 | 2.3 | 1,343 | 33 | 2.5 |
| San Francisco | 1,864 | 1,819 | −45 | −2.4 | 1,910 | 90 | 5.0 |
| Total, all Districts | 18,955 | 18,960 | 5 | 0.0 | 19,468 | 508 | 2.7 |
| National IT | 1,719 | 1,720 | 0 | 0.0 | 1,770 | 50 | 2.8 |
| Office of Employee Benefits | 58 | 0 | n/a | n/a | n/a | n/a | n/a |
| Total | 20,733 | 20,680 | −53 | −0.3 | 21,238 | 558 | 2.7 |
Note: In 2023, the Office of Employee Benefits was consolidated into the Federal Reserve Bank of Atlanta. In past years, National IT was referred to as the Federal Reserve Information Technology office (FRIT).
n/a Not applicable.
Table D.12. Capital expenditures of the Federal Reserve Banks, by District, and of NIT, 2023–24
Millions of dollars, except as noted
| District | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| Boston | 53.5 | 29.9 | –23.6 | –44.1 | 59.3 | 29.4 | 98.3 |
| New York | 145.8 | 69.1 | –76.7 | –52.6 | 183.1 | 114.0 | 165.0 |
| Philadelphia | 15.7 | 7.2 | –8.5 | –54.1 | 22.4 | 15.2 | 211.1 |
| Cleveland | 29.7 | 32.2 | 2.5 | 8.4 | 31.4 | –0.8 | –2.5 |
| Richmond | 17.0 | 19.0 | 2 | 11.8 | 18.2 | –0.8 | –4.2 |
| Atlanta | 80.9 | 58.2 | –22.7 | –28.1 | 145.9 | 87.7 | 150.7 |
| Chicago | 43.8 | 31.7 | –12.1 | –27.6 | 30.3 | –1.4 | –4.4 |
| St. Louis | 39.0 | 32.8 | –6.2 | –15.9 | 32.9 | 0.1 | 0.3 |
| Minneapolis | 34.2 | 27.8 | –6.43 | –18.8 | 30.7 | 2.93 | 10.6 |
| Kansas City | 69.0 | 46.4 | –22.6 | –32.8 | 63.9 | 17.5 | 37.7 |
| Dallas | 45.3 | 29.2 | –16.1 | –35.5 | 48.1 | 18.9 | 64.7 |
| San Francisco | 134.5 | 107.0 | –27.5 | –20.4 | 118.2 | 11.2 | 10.5 |
| Total, all Districts | 708.4 | 490.5 | –217.9 | –30.8 | 784.4 | 293.9 | 59.9 |
| National IT | 179.8 | 155.0 | –24.8 | –13.8 | 129.4 | –25.6 | –16.5 |
| Total | 888.2 | 645.5 | –242.7 | –27.3 | 913.8 | 268.3 | 41.7 |
2023 Budget Performance
Total 2023 operating expenses for the Reserve Banks were $5,648.3 million, which is $2.1 million, or 0.04 percent, more than the approved 2023 budget of $5,646.2 million. Budget performance reflects higher-than-planned expenses for the data center modernization effort; severance and outside agency help expenses to address staffing alignment across the System; and to a lesser extent, expenses related to the administration of the Paycheck Protection Program Liquidity Facility program. These increases were offset by lower-than-anticipated postretirement expenses and lower-than-planned facilities expenses. Actual full-time equivalents (FTE) was 20,680, an underrun of 53 FTE, or 0.3 percent, from 2023 budgeted staffing levels. The Reserve Banks' 2023 capital expenditures were less than budgeted by $242.7 million, or 23.7 percent, primarily driven by delayed and canceled projects.
2024 Operating Expense Budget
The 2024 operating budgets of the Reserve Banks total $6,053.2 million, which is $404.9 million, or 7.2 percent, higher than 2023 actual expenses.11 Growth in monetary policy expense reflects increased resources dedicated to researching inflation and enhancing existing and developing new inflation indicators. Treasury growth is primarily attributable to fees, software, and personnel for temporary resources and vendor support to meet System and Treasury deadlines for cloud migrations, security mandates, and technical debt remediation. Cash investments reflect increases across several Districts to support local implementations for the NextGen program.12 Supervision resource additions align with portfolio growth. Investments in fee-based services are for the FedNowSM Service which, aligns with the Federal Reserve System's commitment to modernize the nation's payment system and establish a safe and efficient foundation for the future.
Total 2024 budgeted employment for the Reserve Banks and National IT is 21,238 FTEs, an increase of 558, or 2.7 percent, from 2023 actual employment levels.
Reserve Bank officer and staff personnel expenses for 2024 total $4,436.6 million, an increase of $206.5 million, or 4.9 percent, from 2023 actual expenses. The increase reflects expenses associated with additional staff, salary administration, variable pay, and retirement and other benefit costs.13
The 2024 Reserve Bank budgets include a salary administration program for eligible officers, senior professionals, and staff totaling $131.3 million and a variable pay program totaling $281.3 million.
2024 Capital Budgets
The 2024 capital budgets for the Reserve Banks and National IT total $913.8 million. The increase in the 2024 capital budget is $268.4 million, or 41.6 percent, greater than the 2023 actual levels of $645.5 million, and includes ongoing, multiyear, strategic IT initiatives, investments in cash services, and building projects. Initiatives in the 2024 capital budget support the development and deployment phase of NextGen, cash facility renovations, address aging building infrastructure in several Reserve Banks, continue data center modernization, and improve IT infrastructure.
Capital Expenditures Designated for Conditional Approval
The BAC chair designated projects with an aggregate cost of $334.2 million in 2024 for conditional approval, requiring additional review and approval by the director of the Board's Division of Reserve Bank Operations and Payment Systems (RBOPS) before the funds are committed.14 The expenditures designated for conditional approval comprise several cash investments including the development and deployment of currency processors and facility renovations as part of the NextGen program, and funds to expand an existing cash vault and build a new cash facility. Technology projects include investments to modernize the data center and migrate applications to cloud to increase agility, speed, resilience, and operational efficiency.
Other Capital Expenditures
Significant capital expenditures (typically expenditures exceeding $1 million) that are not designated for conditional approval include total multiyear budgeted expenditures of $1,359.5 million for 2024 and future years, of which the single-year 2024 budgeted expenditures are $570.1 million. This category includes necessary infrastructure investments for building and IT projects, and applications support for cash, priced services, monetary policy, and supervision initiatives.
Capital initiatives that are individually less than $1 million are budgeted at an aggregate amount of 72.6 million for 2024 and include building maintenance expenditures, scheduled software and equipment upgrades, and equipment and furniture replacements.
Currency Budget
The currency budget provides funds to reimburse the Treasury's Bureau of Engraving and Printing (BEP) for expenses related to the production of banknotes, and the Board's activities related to its role as issuing authority of the nation's currency in the form of Federal Reserve notes.15 As the issuing authority, the Board is responsible for ensuring that there is an adequate supply of banknotes in circulation, the banknotes meet defined quality standards, and that the development of banknote security features and new design concepts are robust against counterfeiting.
To support the Board's role, the budget includes BEP note production costs, consistent with the annual calendar year print order submitted by the director of RBOPS on behalf of the Board. The budget also funds Board costs to ship new currency from the BEP to Reserve Banks, ship currency between the Reserve Banks, and program management expenses to support long-term issuance strategies and resiliency.16
Program management expenses include work by Board staff, with support from the Reserve Banks, the Treasury Department, the BEP, and the U.S. Secret Service, to ensure that notes meet quality standards and have suitable anti-counterfeit features, from production through destruction.
In addition, the Board plays a central role in protecting the integrity of, and maintaining public confidence in, U.S. currency. The U.S. Currency Program (USCP) stakeholders perform development and testing of security features and designs in support of the next banknote family. Board staff monitors counterfeiting threats for each denomination and conducts adversarial analysis to ensure resistance to counterfeiting.
The currency budget also funds the Currency Education Program (CEP), which aims to protect and maintain confidence in U.S. currency worldwide by facilitating counterfeit-detection trainings for Reserve Bank and foreign central bank staff and providing education and information about banknote security features to the public. The CEP also conducts outreach to key stakeholders, including commercial banks, retailers, and law enforcement agencies on USCP initiatives.
The annual currency budget process is as follows:
- Each year, under authority delegated by the Board, the director of the RBOPS submits a fiscal year print order for notes to the director of the BEP.
- The BEP forecasts expenses for the single-cycle calendar-year and multicycle project budgets. The single-cycle budget includes fixed and variable costs for printing Federal Reserve notes and support costs. The multicycle budget includes costs related to significant capital investments.
- Board staff develop budgets for Board expenses in relation to strategic guidance set by the RBOPS officer responsible for the cash program of work.
- The various sections of the budget are independently reviewed by Board staff, who also prepare a consolidated budget recommendation for BAC and Board approval.
- The BAC reviews the proposed currency budget.
- The BAC chair submits the proposed currency budget to Board members for review and final action.
2023 Budget Performance
BEP Single-Cycle Operating Costs
BEP single-cycle operating costs were $858.3 million, which was $0.3 million, or 0.04 percent, below the budgeted amount for 2023. The budget underrun in variable printing costs was offset by a similar-sized overrun in fixed printing costs as the BEP realized capital outlays delayed from 2022. BEP support costs underran the 2023 budget largely driven by attrition of staff supporting destruction and compliance. Additionally, the BEP's 2023 actual operating cost included a credit of $24.2 million that resulted from Board reimbursements exceeding BEP's actual expenditures in 2022 for paper and certain fixed costs. Absent the credit adjustment, BEP single-cycle operating costs were $882.6 million, which was $23.9 million, or 2.8 percent, over the budgeted amount for 2023.
Board Single-Cycle Operating Costs
Board costs were $65.3 million, which was $7.5 million, or 10.2 percent, under the budgeted amount for 2023. The primary drivers were lower currency issuance costs for banknote transportation and an underrun in banknote development. Lower currency issuance costs were due to lower-than-expected transportation contract price increases and fewer contingency shipments required because inventory levels stabilized since the COVID-19 pandemic subsided. Banknote development's underrun was primarily due to decreased membership fees for the Central Bank Counterfeit Deterrence Group and scope changes to contracts.
2024 Budget
Table D.13 summarizes the 2024 single-cycle currency operating budget of $1,104.0 million. The 2024 single-cycle operating budget represents an increase of $180.3 million, or 19.5 percent, from 2023 actual expenses. BEP costs associated with the printing of Federal Reserve notes are 93.6 percent of the operating budget. Board expenses for currency issuance, banknote development, and currency education comprise the remaining 6.4 percent of the operating budget. Table D.14 provides an overview of the multicycle project budget that funds the BEP's capital investments.
Table D.13. Federal Reserve single-cycle currency budget, 2023–24
Millions of dollars, except as noted
| Item | 2023 budget |
2023 actual |
Variance 2023 actual to 2023 budget |
2024 budget |
Variance 2024 budget to 2023 actual |
||
|---|---|---|---|---|---|---|---|
| Amount | Percent | Amount | Percent | ||||
| BEP costs1 | 858.7 | 858.3 | −0.3 | 0.0 | 1,033.7 | 175.4 | 20.4 |
| Printing Federal Reserve notes | 852.5 | 852.5 | 0.0 | 0.0 | 1,027.4 | 174.9 | 20.5 |
| BEP fixed printing costs | 587.0 | 587.0 | 0.0 | 0.0 | 665.5 | 78.5 | 13.4 |
| BEP variable printing costs | 265.5 | 265.5 | 0.0 | 0.0 | 361.9 | 96.4 | 36.3 |
| BEP support costs | 6.2 | 5.9 | −0.3 | −4.8 | 6.3 | 0.5 | 8.0 |
| Currency reader | 1.0 | 1.0 | 0.0 | 3.7 | 1.1 | 0.1 | 11.4 |
| Destruction and compliance | 5.2 | 4.8 | -0.3 | −6.5 | 5.2 | 0.4 | 7.3 |
| Board costs | 72.8 | 65.3 | −7.5 | −10.2 | 70.2 | 4.9 | 7.6 |
| Currency issuance2 | 33.6 | 28.4 | −5.2 | −15.6 | 31.7 | 3.2 | 11.4 |
| Banknote development3 | 32.2 | 31.0 | −1.3 | −4.0 | 32.6 | 1.6 | 5.2 |
| Currency education3 | 6.9 | 5.9 | −0.9 | −13.5 | 6.0 | 0.1 | 1.4 |
| Operating budget | 931.4 | 923.6 | −7.8 | −0.8 | 1,104.0 | 180.3 | 19.5 |
1. BEP costs (budget and actual) reflect Board reimbursements to the BEP, which may vary from BEP's actual expenses. Annually, a true-up process is in place to account for any variance between Board reimbursement and BEP actual expenses. Return to table
2. Includes currency transportation, personnel, and other support costs. Return to table
3. Includes personnel, travel, and training costs applicable to the budget categories that they support. Return to table
Table D.14. Multicycle projects in the currency budget, 2023–24
Millions of dollars, except as noted
| Item | 2022 and prior actual |
2023 budget | 2023 actual | 2024 budget | Lifetime project budget |
|---|---|---|---|---|---|
| BEP project funding | |||||
| Fort Worth facility expansion1 | 253.9 | 28.9 | 18.8 | 10.2 | 282.8 |
| Washington, D.C. replacement facility2 | 64.7 | 62.3 | 56.2 | 39.2 | 1,784.1 |
| Note production equipment3 | 142.0 | 43.8 | 48.9 | 215.3 | 1,265.0 |
| Total | 460.6 | 135.0 | 124.0 | 264.7 | 3,331.9 |
1. In August of 2021, the Board approved a lifetime project budget of $282.8 million. Return to table
2. In December of 2022, the Board approved $134.1 million. In October of 2023, the Board approved an additional $1,650.0 million. Return to table
3. In August of 2023, under delegated authority, the director of the Board's Division of Reserve Bank Operations and Payment Systems approved a reimbursable limit of $746.8 million. In December of 2023, the Board conditionally approved the remainder of the project. Return to table
Figure D.4. Federal Reserve costs for currency, 2014–2024
Note: In the previous report, values for 2022 and 2023 represented single-cycle operating costs only. All years now represent the sum of single-cycle operating costs and multicycle projects. For 2024, budgeted.
BEP Single-Cycle Operating Costs
The proposed 2024 budget to fund the BEP printing and support costs is $1,033.7 million, which is $175.4 million, or 20.4 percent, higher than 2023 actual expenses.
The budget for fixed printing costs is $665.5 million, which is $78.5 million, or 13.4 percent, higher than 2023 actual expenses. Fixed costs are growing to support cybersecurity efforts and information technology upgrades, and to fund increased staffing levels for manufacturing support. The increase in fixed costs is partially offset by reduced spending in research and development projects in 2024 because a number of projects have been closed.
The budget for variable printing costs is $361.9 million, which is $96.4 million, or 36.3 percent higher than 2023 actual expenses. The increase is primarily a result of higher expected note deliveries in 2024 than in 2023 and increased raw material costs.
BEP Multicycle Project Operating Costs
There are three multicycle projects included in the 2024 budget; the BEP's Fort Worth facility expansion (WCF); the BEP's Washington, D.C. replacement facility (DCRF); and modernization of BEP note production equipment. The combined lifetime project budget for WCF, DCRF, and note production equipment is $3,331.9 million.
As of October 2023, there is a total of $2,853.9 million in approved multicycle project funding, which includes $282.8 million for the expanded WCF facility, $1,784.1 million for the new DCRF facility, and $787.0 million for a generational upgrade of note production equipment for both BEP facilities. The Board designated an additional $478.0 million for note production equipment as conditional approval, requiring additional review and approval by the director of RBOPS when funding is required. The lifetime project budget of $1,265.0 for note production equipment funds the replacement of nearly all the production equipment at the BEP through 2033.17
The multicycle project budget includes 2024 components for each of the three budgeted projects; $10.2 million for WCF project close-out funds following the completion of the project in 2023, $39.2 million to complete the DCRF design and prepare for the awarding of the construction contract, and $215.3 million for note production equipment to support the BEP and Board's joint commitment in replacing aging equipment.
Board Single-Cycle Operating Costs
The Board costs budget is $70.2 million, which is $4.9 million, or 7.6 percent, higher than 2023 actual costs. The year-over-year change is primarily driven by increases to support the multiyear strategic initiatives.
The currency issuance budget increases are primarily attributable to increased transportation costs for additional note deliveries from the BEP, updated contract pricing, and increased shipments to support Reserve Bank cash offices during renovations to support deployment of NextGen machines.
The banknote development increases are primarily attributable to security feature testing, the banknote usability program to support design and communication initiatives for the next family of notes, improvements to the effectiveness and efficiency of the banknote design process, and the establishment of a program team to oversee the major cross-program initiatives and identify risks with executing those projects.
The currency education program will focus on efforts to protect and maintain confidence in U.S. currency worldwide through public outreach, expansion of domestic and international stakeholder education, and brand strategy to prepare for the release of the next family of notes.
The 2024 currency budget includes two additional positions to support the strategic planning processes, manage increasing scope and complexity in procurements, and manage the growing responsibilities of the USCP. The currency issuance, banknote development, and currency education budget categories also include personnel, travel, training, and support and overhead costs.18
Footnotes
1. Before 2013, information about the budgeted expenses of the Board and Reserve Banks was presented in a separate report titled Annual Report: Budget Review. The report is available at https://www.federalreserve.gov/publications/budget-review/default.htm. Each budget covers one calendar year. Return to text
2. Substantially all employees of the Board and Reserve Banks participate in the Retirement Plan for Employees of the Federal Reserve System (System Plan). Reserve Bank employees at certain compensation levels participate in the Benefit Equalization Plan, and certain Reserve Bank officers participate in the Supplemental Retirement Plan for Select Officers of the Reserve Banks. The operating expenses of the Reserve Banks presented in this section do not include expenses related to the retirement plans; however, the 2023 claims for reimbursement include the allocated portion of the pension. Additional information about these expenses can be found in Appendix G, "Statistical Tables." Board employees also participate in the Benefit Equalization Plan, and Board officers participate in the Pension Enhancement Plan for Officers of the Board of Governors of the Federal Reserve System (PEP). The operating expenses of the Board presented in this section include expenses related to Board participants in the Benefit Equalization Plan and PEP but do not include expenses related to the System Plan. Return to text
3. The System is implementing a strategy to transition the current fleet of high-speed currency processing machines and the associated sensor suite from the Banknote Processing System platform to the future next-generation (NextGen) processing technologies (machines and sensor technologies). Return to text
4. In July 2023, the Federal Reserve launched a new round-the-clock, real-time payment and settlement service, called the FedNow Service, to support faster payments in the United States. The initiative to modernize the ACH processing platform was completed in early 2021. Return to text
5. The capital budget reported for the Board includes single-year capital expenditures and 2024 expected capital expenditures from multiyear projects of the Board and the OIG. The capital budget reported for the Reserve Banks includes the amounts budgeted for the National Information Technology support function and the Office of Employee Benefits. In past years, National Information Technology was referred to as the Federal Reserve Information Technology office (FRIT). In 2023, the Office of Employee Benefits was consolidated into the Federal Reserve Bank of Atlanta. Return to text
6. The Board approved the plan published in December 2023 and is located at https://www.federalreserve.gov/publications/files/2024-2027-gpra-strategic-plan.pdf. Return to text
7. Monetary Policy and Financial Stability, Supervision and Regulation, Payment System and Reserve Bank Oversight, Consumer Protection and Community Development, and Mission Advancement. Return to text
8. The plan is located at https://oig.federalreserve.gov/strategic-plan.htm. Return to text
9. The five umbrella committees are (1) Governance and Risk; (2) People; (3) Payments; (4) Technology and Operations; and (5) Research, Banking, Communities, and Communications. Return to text
10. Additional information about the operating expenses of each of the Reserve Banks can be found in Appendix G, "Statistical Tables" (see "Table G.9. Income and expenses of the Federal Reserve Banks, by Bank"). Return to text
11. On December 15, 2023, the Board approved the 2024 Reserve Bank operating budgets totaling $6,053.2 million. Additional information is available at https://www.federalreserve.gov/foia/budgets.htm. Return to text
12. FedCash (formerly the Cash Product Office) is transitioning the existing fleet of high-speed currency processing machines and the sensor suite from the Banknote Processing System platform to the future NextGen processing infrastructure. Return to text
13. The salary administration program includes a budgeted pool for merit increases, equity adjustments, and promotions. Return to text
14. Generally, capital expenditures that are designated for conditional approval include certain building projects, District expenditures that substantially affect or influence future System direction or the manner in which significant services are performed, expenditures that may be inconsistent with System direction or vary from previously negotiated purchasing agreements, and local expenditures that duplicate national efforts. Return to text
15. As mandated by the Federal Reserve Act, section 16, the Board reimburses the BEP for all costs related to the production of Federal Reserve notes. Section 16 of the Federal Reserve Act also requires that all costs incurred for the issuing of notes shall be paid for by the Board and included in its assessments to the Reserve Banks. Operations and capital investments of the BEP have been generally financed by a revolving fund that is reimbursed through product sales, nearly all of which are sales of Federal Reserve notes to the Board to fulfill its annual print order. Return to text
16. The Board delivers the annual print order to the BEP director every year which is available on the Board's website at https://www.federalreserve.gov/paymentsystems/coin_currency_orders.htm. Return to text
17. BEP staff estimates that the equipment will have a life expectancy of 15 to 20 years and will require mid-lifecycle upgrades 7 to 10 years after it has been placed in service. Return to text
18. The currency budget includes support and overhead costs for enterprise IT, facilities, law enforcement, human resources, and other services. Return to text