"Critics of the Federal Reserve (Fed) have long argued for more oversight, transparency, and disclosure. Criticism intensified following the extensive assistance the Fed provided to financial firms during the financial crisis. Some critics downplay the degree of Fed oversight and disclosure that already takes place.
For oversight, the Fed has been statutorily required since 1978 to provide a written report to and
testify before the congressional committees of jurisdiction semi-annually. In addition, these
committees periodically hold more focused hearings on Fed topics. Critics have sought a
Government Accountability Office (GAO) audit of the Fed. The Fed’s financial statements are
annually audited by private-sector auditors. Contrary to popular belief, GAO has periodically
conducted Fed audits since 1978, subject to statutory restrictions, and a GAO audit would not,
under current law, release any confidential information identifying institutions that have borrowed
from the Fed or the details of other transactions. The Dodd-Frank Act (P.L. 111-203) resulted in
an audit of the Fed’s emergency activities during the financial crisis, released in July 2011, and an
audit of Fed governance, released in October 2011. GAO can currently audit all Fed activities for
waste, fraud, and abuse. Effectively, the remaining statutory restrictions prevent GAO from
evaluating the economic merits of Fed policy decisions. H.R. 3189, passed by the House, would
require annual GAO audits that would not be subject to statutory restrictions..."