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Board of Governors of the Federal Reserve System

2009

Board of Governors of the Federal Reserve System

2009

August 2009
This publication is available from Publications Fulfillment, MS N-127, Board of Governors
of the Federal Reserve System, Washington, DC 20551. It is also available on the Board’s
website (www.federalreserve.gov).

Contents
1 INTRODUCTION
1 Summary of 2008 Income and Expenditures
2 Operational Areas

The Budgets
9
10
10
11

Chapter 1
FEDERAL RESERVE SYSTEM
2009 System Budget Initiatives
Trends in Expenses and Employment
2009 Capital Budgets

Chapter 2
13 BOARD OF GOVERNORS
13 2008–09 Budget
14 2008 Budget Performance
17
18
19
20
21
21
22

Chapter 3
FEDERAL RESERVE BANKS
2008 Budget Performance
Initiatives Affecting the 2009 Budget
Five-Year Trend in Reserve Bank Expenses
2009 Personnel Expenses
Risks in the 2009 Budget
2009 Capital Plan

25
26
26
27
27

Chapter 4
CURRENCY BUDGET
Printing of Federal Reserve Notes
Currency Transportation
Counterfeit-Deterrence Research
Reimbursement to the Treasury’s Office of Compliance

Appendixes
Appendix A
31 FEDERAL RESERVE BUDGET PROCESSES
31 Board of Governors
31 Federal Reserve Banks
Appendix B
33 PRICED SERVICES
33 Annual Pricing Process
Appendix C
35 EXPENSES AND EMPLOYMENT AT THE BOARD OF GOVERNORS

39

Appendix D
EXPENSES AND EMPLOYMENT AT THE FEDERAL RESERVE BANKS

Maps
44 MAPS OF THE FEDERAL RESERVE SYSTEM

1

Introduction
The Federal Reserve System—the nation’s central bank—consists of the
Board of Governors in Washington,
D.C., the 12 Federal Reserve Banks
with their 24 branches distributed
throughout the nation, the Federal Open
Market Committee (FOMC), and three
advisory councils—the Federal Advisory Council, the Consumer Advisory
Council, and the Thrift Institutions Advisory Council. The System was created in 1913 by the Congress to establish a safe and flexible monetary and
banking system. Over the years, the
Congress has given the Federal Reserve
more authority and responsibility for
achieving broad national economic and
financial objectives.
The duties of the Federal Reserve
fall into four general areas: (1) conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in the pursuit of
maximum employment, stable prices,
and moderate long-term interest rates;
(2) supervising and regulating banking
institutions to ensure the safety and
soundness of the nation’s banking and
financial system and to protect the
credit rights of consumers; (3) maintaining the stability of the financial system and containing systemic risk that
may arise in financial markets; and
(4) providing financial services to depository institutions, the U.S. government, and foreign official institutions.
The Federal Reserve System plays a
major role in the nation’s payment system. The Reserve Banks issue currency
and distribute coin; process Fedwire,
automated clearinghouse, and securities
transfers; and collect checks. In addition, the Reserve Banks serve as the
fiscal agents of the United States and

provide a variety of financial services
for the Treasury, other government
agencies, and other fiscal principals.
For a fuller discussion of the Federal
Reserve’s responsibilities, see the
Board publication The Federal Reserve
System: Purposes & Functions.

Summary of 2008
Income and Expenditures
In carrying out its responsibilities in
2008, the Federal Reserve System incurred $2.5 billion in net expenses.1 Total spending of $3.9 billion was offset
by $1.4 billion in revenue from priced
services, claims for reimbursement, and
other income. Total 2008 expenses
were $149.3 million, or 3.7 percent,
less than the amount budgeted for 2008
(table I.1).2
The major source of Reserve Bank
income is earnings from the portfolio of
U.S. government securities in the System Open Market Account, totaling
$27.5 billion in 2008. Earnings in excess of expenses, dividends, and surplus are transferred to the U.S.
1. With this 2009 Annual Report: Budget Review, there has been a change in the way expenses are presented: the costs of printing and
transporting currency, and related expenses, are
now included in total System expenses, to align
with the presentation in the 2008 Annual Report
of the Board of Governors of the Federal Reserve
System. In past reports, currency expenses were
shown as a memo item.
2. Beginning with the 1998–99 budget, the
Board of Governors has operated on a two-year
budget cycle and a four-year planning cycle.
Given their business needs, the Federal Reserve
Banks maintain an annual budget cycle. For
more information on the budget processes, see
appendix A.

2 Annual Report: Budget Review, 2009
Table I.1
Total Expenses of the Federal Reserve System, 2008
Millions of dollars, except as noted
Variance
Budgeted

Actual
Amount

Percent

Reserve Banks . . . . . . . . . . . . . . . . .
Board. . . . . . . . . . . . . . . . . . . . . . . . . .
Currency. . . . . . . . . . . . . . . . . . . . . . .

3,067.0
352.31
602.4

3,020.8
351.2
500.4

−46.2
−1.1
−102.0

−1.5
−0.3
−16.9

Total System expenses . . . . . . . . .

4,021.71

3,872.4

−149.3

−3.7

NOTE: Components may not sum to totals and may not yield percentages shown because of rounding.
1. Restated.

Treasury—in 2008, a total of $31.7 billion.3 (These net earnings are treated as
receipts in the U.S. budget accounting
system and as anticipated earnings projected by the Office of Management
and Budget in the U.S. budget.)

Operational Areas
In 2008, the Federal Reserve System
accounted for costs using the following
categories: monetary and economic
policy, supervision and regulation of financial institutions, services to financial
institutions and the public, services to
the U.S. Treasury and other government
agencies, and System policy direction
and oversight.

Monetary and Economic Policy
The monetary and economic policy operational area encompasses Federal Reserve actions to influence the availability and cost of money and credit in the
nation’s economy. In 2008, the Federal
Open Market Committee held eight
regularly scheduled meetings and adjusted the federal funds rate seven
times.
3. For more detailed information on the income and the distribution of income, refer to the
Board’s 2008 Annual Report.

A vast amount of banking and financial data flows through the Reserve
Banks to the Board, where the data are
compiled and made available to the
public. The research staffs at the Board
and the Banks use the data, along with
information collected by other public
and private institutions, to assess the
state of the economy and the relationships between the financial markets and
economic activity. Staff members provide background information to the
Board of Governors and at each meeting of the FOMC by preparing detailed
economic and financial analyses and
projections for the domestic economy
and international markets. The Board
and the FOMC use these analyses and
projections in setting reserve requirements, setting the discount rate (which
affects the cost of borrowing), and conducting open market operations. Staff
members also conduct longer-run economic studies on regional, national, and
international issues.

Supervision and Regulation of
Financial Institutions
The Federal Reserve plays a major role
in the supervision and regulation of
banks and bank holding companies.
The Board of Governors adopts regulations to carry out statutory directives

Introduction 3

and establishes System supervisory and
regulatory policies. The Reserve Banks
conduct on-site examinations and inspections of state member banks and
bank holding companies; review applications for mergers, acquisitions, and
changes in control from banks and bank
holding companies; and take formal supervisory actions. In 2008, the Federal
Reserve conducted 486 examinations of
state member banks (some of them
jointly with state agencies), 500 examinations of large bank holding companies, and 3,048 inspections of small,
noncomplex bank holding companies; it
acted on 1,057 proposals, representing
1,910 individual applications involving
bank holding company formations and
acquisitions, bank mergers, and other
transactions.
The Board also enforces compliance
by state member banks and certain foreign banking organizations with federal
laws protecting consumers in their use
of credit and deposit accounts. Between
July 1, 2007, and June 30, 2008, the
System conducted 268 consumer compliance examinations: 263 covering
state member banks and five covering
foreign banking organizations. Also
during that period, the System conducted 243 Community Reinvestment
Act examinations.
The Board’s supervisory responsibilities also extend to the foreign operations of U.S. banks and, under the International Banking Act, to the U.S.
operations of foreign banks. Beyond
these activities, the Federal Reserve
System maintains continuous oversight
of the banking industry to ensure the
overall safety and soundness of the financial system. This broader responsibility is reflected in the System’s presence in financial markets, through open
market operations, and in its role as
lender of last resort.

Services to Financial Institutions
and the Public
The Federal Reserve System plays a
central role in the nation’s payment systems by ensuring that enough currency
and coin are in circulation to meet the
public’s demand. The Federal Reserve
Board orders new currency from the
Bureau of Engraving and Printing, and
the Reserve Banks order new coin from
the U.S. Mint. The Federal Reserve
pays for the printing and transportation
of currency. The Reserve Banks issue
currency and distribute coin to the public through depository institutions to
meet demand. The Reserve Banks also
receive deposits of currency and coin
from depository institutions; identify
suspect counterfeit currency, which
they forward to the U.S. Secret Service;
and destroy currency that is unfit for
circulation. In 2008, the Reserve Banks
issued approximately $732.1 billion in
currency, and they distributed $7.0 billion in coin to depository institutions.
The Reserve Banks also received approximately $671.1 billion in currency
and $6.3 billion in coin from depository
institutions and destroyed $148.5 billion in unfit currency. In 2008, the cost
of printing and transporting currency
was $500.4 million.
The Reserve Banks also play a central role in the nation’s payment systems by collecting checks and providing a variety of electronic services for
depository institutions. In 2008, the
Banks collected approximately 9.5 billion commercial checks, with a total
value of about $15.2 trillion. The
Banks’ automated clearinghouse (ACH)
service allows depository institutions to
send or receive credit transfers, such as
direct payroll payments and corporate
payments to vendors, and debit payment transactions authorized by consumers, such as payments of insurance
premiums, mortgages, loans, and other

4 Annual Report: Budget Review, 2009

bills from their accounts. In 2008, the
Reserve Banks processed approximately 11.2 billion ACH transactions,
valued at about $19.7 trillion. Approximately 10 percent of the transactions
were for the federal government; the rest
were for commercial establishments.
The Reserve Banks’ Fedwire Funds
Service allows participants in the service to use their balances at the Reserve Banks to transfer funds to other
participants. In 2008, the Banks processed approximately 131 million Fedwire funds transfers, valued at approximately $755 trillion.
The Reserve Banks’ National Settlement Service allows participants in private clearing arrangements to settle
transactions through their Federal Reserve accounts. Approximately 42 local
and national private arrangements, primarily check clearinghouse associations, use the National Settlement Service. In 2008, the Banks processed
more than 468,000 settlement entries
for these arrangements, with a debit
value of more than $20.9 trillion.
The Reserve Banks’ Fedwire Securities Service provides securities services
to participants, including the settlement
of book-entry transfers of securities
issued by the U.S. Treasury, federal
government agencies, governmentsponsored enterprises, and certain international organizations. In 2008, participants originated approximately
26 million transfers, valued at about
$429 trillion.

Services to the U.S. Treasury and
Other Government Agencies
Pursuant to the Federal Reserve Act,
the Reserve Banks provide fiscal
agency and depository services to the
U.S. government and other fiscal principals. These services relate to securities custody and transfer, payments,

deposits, and customer support. The
federal government and other fiscal
principals reimburse the Banks for the
cost of providing these services. In
2008, the Reserve Banks sought
reimbursement of approximately $461.1
million. Reimbursement was received
or is expected for all of the expenses
incurred.4
The Reserve Banks issue, service,
and redeem marketable Treasury securities and savings bonds, and they process secondary-market Fedwire securities transfers. In 2008, the Banks
conducted 263 Treasury securities auctions and printed and mailed more than
22 million savings bonds. The Reserve
Banks
operate
two
book-entry
(computer-based) securities systems for
the custody of Treasury securities—the
Fedwire Securities Service and a separate computer application designed for
retail investors who plan to hold these
securities until maturity. Almost all
book-entry Treasury securities are
maintained on Fedwire, which is also
the nation’s principal securities-transfer
mechanism.
The Reserve Banks collect and disburse funds on behalf of the federal
government. They maintain the Treasury’s bank account, accept deposits,
pay checks drawn on the Treasury’s account, and make Fedwire and automated clearinghouse payments for the
Treasury. In 2008, the Banks continued
to assist the Treasury in its efforts to receive and make payments electronically. For example, they operate the
Pay.gov Internet portal, which enables
the public to make payments to the
Treasury and other federal government
agencies over the Internet.
4. The Reserve Banks are required by the Federal Reserve Act to serve as fiscal agents and depositories of the United States. By statute, the
Department of the Treasury has appropriations to
pay for these services.

Introduction 5

The Reserve Banks also provide fiscal agency and depository services to
other domestic and international entities. Depending on the authority under
which the services are provided, the
Banks may maintain book-entry accounts of securities; provide custody
for the stock of unissued, definitive
(physical) securities; maintain and update balances of outstanding book-entry
and definitive securities for issuers; and
maintain related funds accounts.

System Policy Direction
and Oversight
This operational area encompasses activities by the Board of Governors in
supervising Board and Reserve Bank
programs. At the Reserve Bank level,
the expenses for these activities are
considered support and are therefore
allocated across the other operational
areas.
Á

The Budgets

9

Chapter 1

Federal Reserve System
Total net expenses for the Federal Reserve System for 2009 are budgeted
at $4,084.4 million, an increase of
5.5 percent from 2008 actual expenses.
Of this total, $3,086.2 million is for the
Reserve Banks, $366.7 million is for
the Board of Governors, and $631.5 million is for the cost of new currency
(tables 1.1 and 1.2).1 Revenue from
priced services provided to depository
institutions is expected to total $692.4
million, or 17 percent of total budgeted
expenses. This revenue, combined with
claims for reimbursement and other income, results in the recovery of 28 percent of the System’s budgeted 2009 expenses.2 When these items are deducted
1. The Board of Governors budgets on a twoyear cycle; in this chapter, 2009 values shown for
the System and the Board reflect the estimated
second-year effect of the Board’s 2008-09 budget.
2. Claims for reimbursement refers to costs of
fiscal agency and depository services provided to
the U.S. Treasury, other government agencies,

from budgeted 2009 expenses, net expenses of the System are 15.5 percent
higher than 2008 net expenses (table
1.1), primarily because of a decline in
priced services revenue and an increase
in currency costs.
The distribution of budgeted expenses is similar to that in previous
years, with the Reserve Banks’ expenses accounting for 76 percent of the
total, new currency expenses accounting
for 15 percent, and Board expenses accounting for the remainder (chart 1.1).
System employment is budgeted at
20,018 for 2009, a decrease of 727
from the 2008 level, largely because of
planned staff reductions by the Reserve
Banks.
and other fiscal principals that are billed to these
agencies. Other income comes from services provided on behalf of the U.S. Treasury that are paid
for by the depository institutions using the services, which include the transfer of funds between depository institutions and the Treasury.

Table 1.1
Total Expenses of the Federal Reserve System, Net of Receipts and Claims for
Reimbursement, 2007−2009
Millions of dollars, except as noted
Percent change

2007
(actual)

2008
(actual)

2009
(budgeted)

2007 to 2008

Total System expenses1 . . . . . . . . . . . . .

3,883.02

3,872.4

4,084.4

−0.3

5.5

LESS
Revenue from priced services. . . . .
Other income . . . . . . . . . . . . . . . . . . . .
Claims for reimbursement3 . . . . . . .

1,012.4
1.4
458.2

873.8
1.3
461.1

692.4
1.3
461.7

−13.7
−9.5
0.6

−20.8
0.0
0.1

EQUALS
Net System expenses . . . . . . . . . . . .

2,411.12

2,536.2

2,929.0

5.2

15.5

Item

2008 to 2009

NOTE: Components may not sum to totals and may not yield percentages shown because of rounding. Total
expenses reflect all redistributions for support and overhead and exclude capital outlays.
1. With this 2009 Annual Report: Budget Review, there has been a change in the way expenses are presented: the
costs of printing and transporting currency, and related expenses, are now included in total System expenses, to
align with the presentation in the Board’s 2008 Annual Report. Relevant figures for 2007 and 2008 also include
currency expenses, which in past reports were shown as a memo item.
2. Restated to include Office of Inspector General expenses and extraordinary items.
3. Costs of fiscal agency and depository services provided to the U.S. Treasury, other government agencies, and
other fiscal principals that are billed to these agencies.

10 Annual Report: Budget Review, 2009
Table 1.2
Expenses of the Federal Reserve System for Operations and Currency, 2007−2009
Millions of dollars, except as noted

Item
1

Reserve Banks . . . . . . . . . . . . . . . .
Personnel. . . . . . . . . . . . . . . . . . . .
Nonpersonnel . . . . . . . . . . . . . . . .

Percent change

2007
(actual)

2008
(actual)

2009
(budgeted)

2,983.5
2,013.7
969.8

3,020.8
2,021.3
999.5

3,086.2
2,102.4
983.8

1.3
0.4
3.1

2.2
4.0
−1.6

2007 to 2008

2008 to 2009

Board of Governors2 . . . . . . . . . . .
Personnel. . . . . . . . . . . . . . . . . . . .
Nonpersonnel . . . . . . . . . . . . . . . .

323.53
237.13
86.43

351.2
268.2
83.0

366.7
274.1
92.6

8.6
13.1
−3.9

4.4
2.2
11.6

Currency4 . . . . . . . . . . . . . . . . . . . . . .

576.0

500.4

631.5

−13.1

26.2

Total System expenses . . . . . . . . .

3,883.03

3,872.4

4,084.4

−0.3

5.5

NOTE: Expenses exclude capital outlays. Components may not sum to totals and may not yield percentages shown
because of rounding.
1. For detailed information on Reserve Bank expenses, see chapter 3.
2. Includes extraordinary items and expenses of the Office of Inspector General. See also chapter 2.
3. Restated to include Office of Inspector General expenses and extraordinary items.
4. For more information on currency expenses, see chapter 4.

Chart 1.1
Distribution of Budgeted Expenses of the
Federal Reserve System, 2009

Trends in
Expenses and Employment
From the actual 2000 level to the budgeted 2009 amount, the total expenses
of the Federal Reserve System have increased an average of 3.8 percent per
year (1.2 percent per year when adjusted for inflation) (chart 1.2). Over
the same period, nondefense discretionChart 1.2
Total Expenses of the Federal Reserve
System, 2000−2009

2009 System Budget Initiatives
The Reserve Bank budgets are funding
increases in the central bank functions,
specifically monetary policy and public
programs, supervision and regulation
functions, and cash operations, offset
by reductions in the check operations.
The major factors affecting the 2009
Reserve Bank budgets are outlined in
more detail in chapter 3.

NOTE: Expenses for 2007 have been restated so that all
years include Office of Inspector General expenses and
extraordinary items. For all years, includes the costs of
new currency. For 2009, budgeted.
1. Calculated with GDP price deflator.

Federal Reserve System 11
Chart 1.3
Cumulative Change in Federal Reserve
System Expenses and Federal Government
Expenses, 2000−2009

NOTE: For 2009, budgeted.
1. Discretionary spending less expenditures on defense. Source: Budget of the United States Government,
Fiscal Year 2009: Historical Tables, Table 8.1 Outlays
by Budget Enforcement Act Category, 1962−2013.
2. Includes the cost of new currency and Office of Inspector General expenses and extraordinary items.

ary spending by the federal government
has increased an average of 6.0 percent
per year (chart 1.3). Over the
2000−2009 period, Federal Reserve
System employment has decreased
4,853 (chart 1.4).
The primary factors influencing both
Reserve Bank spending restraint and
the substantial staffing decreases over
the past 10 years have been restructuring efforts in the check-processing
function and efficiency measures in the
support and overhead functions. Over
the same ten-year period, check costs
decreased an average of 4.3 percent and
the staffing level declined an average of
11.9 percent annually as a result of increased efficiencies and investments in
technology. Local support and overhead
costs increased an average of 1.6 percent annually and the staffing level de-

Chart 1.4
Employment in the Federal Reserve
System, 2000−2009

NOTE: For 2009, budgeted.

clined an average of 3.9 percent annually over the same ten-year period.

2009 Capital Budgets
The capital budgets for the Reserve
Banks and the Board total $550.3 million, with $519.4 million budgeted for
the Reserve Banks and Federal Reserve
Information Technology (FRIT) and
$30.9 million budgeted for the Board.
As in previous years, the 2009 capital
budgets include funding for projects
that support the strategic direction outlined by the individual Reserve Banks,
System business leaders, and the Board.
These strategic goals focus on investments that continue to improve operational efficiencies, enhance services to
bank customers, and ensure a safe,
high-quality work environment. More
detailed discussions of the Board and
Reserve Bank capital budgets are included in chapters 2 and 3, respectively.

13

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.
In 2009, $30.1 million, or 4.3 percent, was added to the Board’s operating budget, bringing the two-year bud-

get 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

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. . . . . . . . . . . . . .
Supervisory, regulatory, and legal services . . .
Federal Reserve System policy direction. . . . .
Support and security services . . . . . . . . . . . . . . .
Extraordinary items . . . . . . . . . . . . . . . . . . . . . . . .

143.1
206.4
55.6
195.4
9.0

137.9
200.5
55.9
198.8
8.3

169.1
232.0
66.3
236.9
2.0

78.1
117.1
31.0
119.6
0.1

46.2
50.5
46.7
50.5
6.3

Total, Board operations . . . . . . . . . . . . . . . . . . .

609.5

601.4

706.3

345.9

49.0

Total, capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31.4

24.7

47.8

8.9

18.6

Office of Inspector General . . . . . . . . . . . . . . . .

10.2

9.5

12.7

5.3

42.1

1

NOTE. Components may not sum to totals and may not yield percentages shown because of rounding.
1. Includes Office of Inspector General.

14 Annual Report: Budget Review, 2009
Table 2.2
Positions Authorized at the Board of Governors, 2006−2009
Position count
Operational area or
Office of Inspector General

2006−07
(initial)

2006−07
(ending)

2008−09
(initial)

2008
(ending)

Monetary and economic policy. . . . . . . . . . . . . .
Supervisory, regulatory, and legal services . . .
Federal Reserve System policy direction. . . . .
Support and security services1 . . . . . . . . . . . . . .
Extraordinary items . . . . . . . . . . . . . . . . . . . . . . . .

466
567
173
770
...

467
577
176
805
...

481
576
179
805
...

484
585
179
832
...

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.
. . . Not applicable.

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.

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. Personnelrelated 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-thanexpected 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.

Board of Governors 15

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

17

Chapter 3

Federal Reserve Banks
The 2009 operating budgets of the 12
Reserve Banks total $3,086.2 million.1
The 2009 total is $65.4 million, or 2.2
percent, above 2008 actual expenses.
This growth is driven by increases in
central bank functions, specifically related to growth in monetary policy and
public programs, supervision and regulation, and cash operations. These increases are significantly offset by decreases in priced services due largely to
the decline in paper-check volume, as a
result of the electronification of check
services, and the associated reductions
in the check-processing infrastructure.
Budgeted net expenses for 2009, after revenue and reimbursements, are expected to increase by $246.1 million, or

1. These expenses include those budgeted by
Federal Reserve Information Technology (FRIT)
and the Office of Employee Benefits (OEB) that
are chargeable to the Reserve Banks.

14.6 percent, over 2008 actual net expenses (table 3.1). Nearly 40 percent of
Reserve Bank expenses in the 2009
budget are offset by priced service revenues (22 percent) and reimbursable
claims for services provided to the
Treasury and other agencies (15 percent).2 Budgeted 2009 priced services
revenue is lower than the 2008 actual
level, primarily as a result of declining
paper-check volume. Reimbursable
claims are expected to increase only
slightly in 2009, reflecting an ongoing
effort by the Treasury and the Reserve
Banks to contain costs while maintaining support for key programs and
advancing new initiatives.

2. Reimbursable claims include costs of fiscal
agency and depository services provided to the
U.S. Treasury, other government agencies, and
other fiscal principals that are billed to and reimbursed by these agencies.

Table 3.1
Operating Expenses of the Federal Reserve Banks, Net of Receipts and Claims for
Reimbursement, 2008 and 2009
Millions of dollars, except as noted
Change

2008
(actual)

2009
(budgeted)

Total operating expenses. . . . . . . . . . . . . . . .

3,020.8

3,086.2

65.4

2.2

LESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenue from priced services. . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . . .
Claims for reimbursement1 . . . . . . . . . . .

873.8
1.3
461.1

692.4
1.3
461.7

−181.4
0.0
0.6

−20.8
0.0
0.1

EQUALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net expenses . . . . . . . . . . . . . . . . . . . . . . . .

1,684.6

1,930.8

246.1

14.6

Item

Amount

Percent

NOTE: Excludes capital outlays. Includes expenses budgeted by Federal Reserve Information Technology and
Office of Employee Benefits. Expenses from these entities have been charged to the Reserve Banks, as appropriate,
and included in their budgets. Components may not sum to totals and may not yield percentages shown because of
rounding. Operating expenses reflect all redistributions for support and allocations of overhead.
1. Costs of fiscal agency and depository services provided to the U.S. Treasury, other government agencies, and
other fiscal principals that are billed to these agencies.

18 Annual Report: Budget Review, 2009
Table 3.2
Employment at the Federal Reserve Banks, FRIT, and OEB, 2008 and 2009
Average number of personnel, except as noted
Change

2008
(actual)

2009
(budgeted)

Amount

Percent

Reserve Banks . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Reserve Information
Technology (FRIT). . . . . . . . . . . . . . . . . . .
Office of Employee Benefits (OEB) . . . . .

17,824

17,086

−738

−4.1

880
43

889
45

9
2

1.0
4.7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,747

18,020

−727

−3.9

Item

NOTE: Components may not sum to totals and may not yield percentages shown because of rounding. See text
footnote 3 for definition of average number of personnel (ANP).

Total 2009 projected employment for
the Reserve Banks, FRIT, and OEB is
18,020 ANP, a decrease of 727 ANP, or
3.9 percent, from the 2008 actual staff
level (table 3.2).3 The 2009 staffing decrease continues the trend of workforce
reductions that began in the late 1990s;
the staffing level is the lowest in the
past 30 years. The 2009 budgeted staff
reductions are largely due to the effect
of infrastructure changes and papercheck volume declines, slightly offset
by staffing increases in central bank
functions.

2008 Budget Performance
Total 2008 actual expenses are $3,020.8
million, which represents a decrease of
$46.2 million, or 1.5 percent, from the
approved 2008 budget of $3,067.0 million. Total 2008 actual staffing of
18,747 ANP represents a decrease of
508 ANP from 2008 budgeted levels of
19,255 ANP.
The expense decrease compared to
budget was driven in part by the accelerated closing of check-processing sites
3. ANP is the average number of employees in
terms of full-time positions for the period. For instance, a full-time employee who works one-half
of the year counts as 0.5 ANP for that calendar
year; two half-time employees who work the full
year count as 1 ANP.

in 2008. System check-service costs decreased $17.3 million, or 2.7 percent,
because of significant cost-containment
efforts and a reduction in resources
commensurate with the faster-thanexpected decline in paper-check volumes. In 2007, the Reserve Banks
planned to reduce check-processing
sites from 22 to 4 by 2011 but now
plan to contract to one full-service paper check-processing site by late 2009
or early 2010.
Also contributing to the underrun is a
decrease in cash operation costs of
$16.5 million, or 3.7 percent, under the
approved 2008 budget. The underrun
reflects lower personnel costs of $6.4
million, including lower staffing levels
in response to volume declines and delays in equipment upgrades of $2.7 million. Timing shifts in projects account
for the majority of the remainder of the
underrun. Treasury services were under
budget by $8.8 million, or 2.0 percent,
largely as a result of the Treasury Web
Application Infrastructure (TWAI) optimization program, an effort to identify
efficiencies and cost savings, and delays
in the Treasury’s Collections and Cash
Management Modernization (CCMM)
initiative.4
4. CCMM is a comprehensive multi-year enterprise architecture initiative to streamline, modernize, and improve the services, systems, and

Federal Reserve Banks 19

Partially offsetting the underrun were
increased expenses in the supervision
and regulation area. Expenses were
over budget by $1.8 million, or 0.3 percent,
for
enhanced
automation
resources.
The underrun of 508 ANP, as compared with the approved budget, reflects
lower staffing in several areas. Check
operations are 295 ANP under budget
because of higher-than-projected volume declines. Treasury services is 62
ANP below budget, reflecting the
CCMM initiative and volume reductions. Cash operations is 43 ANP under
budget, primarily because of volume
declines and productivity gains. The facilities management function is 32 ANP
under budget because of outsourced
housekeeping in one district and reduced building and housekeeping needs
in some of the Branch operations. Efficiencies and hiring delays in several areas account for the remaining staff reductions.

Initiatives Affecting
the 2009 Budget
For 2009, the Reserve Banks’ budgets
reflect funding for several initiatives
that will address financial stability and
deteriorating banking conditions as well
as enhance resiliency. The 2009 budget
also supports the Reserve Banks’ efforts
to modernize and increase efficiencies
in both the cash and check areas.

Central Bank Services
In the central bank area, which includes
monetary policy, public programs, suprocesses supporting the Treasury’s collections
and cash-management programs. The goal is to
improve efficiency and reduce costs to the Treasury, which provides a savings to the taxpayers.

pervision and regulation, and cash operations, expenses are increasing
$194.6 million, or 10.9 percent, in
2009. The staffing level is increasing
208 ANP, in part because of the fullyear effect of staff additions in 2008
and personnel needed to support resiliency efforts. Total costs for monetary
policy and public programs are increasing $54.1 million, or 10.4 percent,
driven primarily by salary-related costs
and resiliency enhancements in central
bank functions and other aspects of
open market operations.
The budget for the supervision and
regulation function is increasing
$72.0 million, or 11.2 percent, over actual 2008 expenses, primarily for additional resources to address financial stability issues and increased supervision
needs. The staffing level is increasing
by 111 ANP.
Expenses in cash operations are increasing $48.5 million, or 11.3 percent.
The Currency and Coin Handling Environment (CACHE) project and increased support charges, primarily for
building and protection services, are
driving the increase.5 These expenses
are slightly offset by staffing reductions
resulting from lower-than-expected
volumes.

Treasury-Related Functions
The budget for services to the Treasury,
which are fully reimbursed, are increasing $2.3 million, or 0.5 percent. The
CCMM initiative, which transitioned
several Treasury business lines to
5. The CACHE project was formerly named
the Future Cash Automation Project (FCAP). The
aim of CACHE is to develop and deploy a new
cash software application and technical architecture in the Federal Reserve Banks to streamline
operations, improve controls, provide more robust
data-management tools, and present a more standardized face to the customer.

20 Annual Report: Budget Review, 2009

private-sector financial agents at the
end of 2008, and continued volume declines in Treasury retail securities, government checks, and postal money orders will reduce costs and the staffing
level, which will decline by 44 ANP.
These reductions are largely offset by
increased charges from FRIT and the
TWAI. Expenses related to the TWAI
are increasing as the number of applications hosted in the infrastructure expands in connection with the CCMM
initiative.

Priced Services
Total check expenses are decreasing
$145.1 million, or 23.6 percent, because of check-restructuring costs recognized in 2008, the accelerated restructuring changes planned for 2009,
and continued paper-check volume declines. In response to the continuing decline in paper-check volumes, the Reserve Banks recently decided that,
likely by late 2009 or early 2010, the
Federal Reserve Bank of Cleveland will
serve as the System’s single papercheck processing and adjustments site
and that the Federal Reserve Bank of
Atlanta will serve as the System’s
single electronic-check processing site.
The check staffing level is decreasing
1,039 ANP as a result of these actions.
Despite these cost reduction efforts, the
Reserve Banks have budgeted a recovery rate of 92.3 percent in 2009. The
Reserve Banks will be reviewing additional steps needed to meet long-term
cost-recovery objectives. The other
priced services provided by the Federal
Reserve—including operating an automated clearinghouse (ACH) service,
transferring funds and securities, and
providing a multilateral settlement
service—did not result in any major expense or staffing initiatives in the 2009
budget.

Support Services
Support costs are increasing $51.6 million, or 5.8 percent. The expense increases are driven primarily by increases for information technology
($30.5 million) and law enforcement
($7.1 million), mainly in salary-related
costs. The staffing level is increasing
106 ANP to support application development and server and data center
operations.

Five-Year Trend in Reserve Bank
Expenses
Total expenses for the Reserve Banks
have grown an average of 4.2 percent
annually over the past five years.

Central Bank Services
Central bank services have grown an
average of 8.0 percent annually over
the past five years. The increase is primarily in the monetary policy and public programs areas, where expenses
have grown on average 9.6 percent annually; the Banks have increased resources dedicated to community outreach, financial literacy, and regional
economic research efforts. Expenses in
the supervision and regulation function
have grown an average of 8.1 percent
annually over the past five years, reflecting the need for additional resources to recruit and retain staff with
specialized skills, to implement the
Basel II capital accord, and, more recently, to address financial market turmoil and deteriorating banking and economic conditions. There have been
ongoing efficiency improvements in the
cash area over the past five years.
Overall, however, expenses in cash operations have increased an average of
5.0 percent annually, reflecting in-

Federal Reserve Banks 21

creased costs to modernize the cashprocessing and inventory-tracking infrastructure and higher support costs,
particularly protection costs.

Treasury Services
Treasury services expenses have grown
on average 4.8 percent annually since
2004. Recent efforts by the Treasury to
limit expense growth and delays in
some projects have resulted in modest
2009 budgeted growth from 2008 actual expenses. The growth from 2004 to
2007 was driven primarily by the expansion of the TWAI to host a growing
number of Treasury applications.

Priced Services
Priced services expenses have been declining an average of 4.2 percent annually, driven by the check service. Efforts to reduce the size of the System’s
check operations, consistent with declining volumes, have resulted in an average annual decline of 7.2 percent in
check-service costs since 2004. The
downward trend in check expenses reflects staff reductions of 2,873 ANP
since 2004.

2009 Personnel Expenses
Budgeted officer and employee salaries
and other personnel expenses for 2009
total $1,613.0 million, representing an
increase of $59.3 million, or 3.8 percent, compared with 2008 actual expenses. The increase represents the
combined effect of the budgeted salary
administration program, including the
staff reductions mentioned previously,
partially offset by reductions in staff related to restructuring and consolidation.
Funding for officer and employee salary

administration programs reflects an increase of $72.1 million. The increase is
due largely to base-salary programs;
merit pools for officers and employees
total $52.7 million, and promotions and
market-based salary adjustments total
$19.4 million. The merit budget reflects
weighted-average increases of 4.2 percent and 4.0 percent in base salaries for
officers and employees, respectively.
Variable pay programs are increasing
$18 million in 2009. The increase primarily is attributed to an increase in
variable pay pools, which average
12.3 percent for officers, 5.2 percent for
exempt staff, and 1.6 percent for nonexempt staff.
The 2009 employee turnover projection of 13.3 percent reflects continued
System downsizing, particularly in the
check area. Excluding positions that
will not be replaced (36 percent of the
total), employee turnover is 8.6 percent.
The Reserve Banks project 6.1 percent
officer turnover in 2009, 5.3 percent after excluding positions that will not be
replaced.

Risks in the 2009 Budget
There are several risks in the 2009 budget. The ongoing challenges in the financial industry and the broader
economy present a considerable amount
of risk. Additional staff will be needed
to meet the supervision and regulation
challenges presented by the current declining banking and economic conditions as well as to support the emergency liquidity facilities. In addition,
there is uncertainty about the resource
needs resulting from any further market
events or new legislation that might
affect the Federal Reserve’s responsibilities.
Cash and Treasury project changes
and delays could increase budgeted expenses. The ongoing CACHE develop-

22 Annual Report: Budget Review, 2009

ment effort poses risks to the 2009 budget, as project details continue to be
refined and as business resources to
support the implementation are fully assessed. Unforeseen requests from the
Treasury or changes in project scope
and direction could add costs and require additional resources in 2009. In
connection with the CCMM initiative,
the Treasury continues to refine its future vision for collections, payments,
and cash-management systems, along
with the timing of different components
of the project. These efforts create a
risk because of the potential changes in
project timing and scope. In addition to
the expense risks mentioned above, unforseen delays or changes in the development of the new Check 21 platform
could pose a risk to the 2009 capital
budget.

2009 Capital Plan
The 2009 capital budget submitted by
the Reserve Banks and FRIT totals
$519.4 million, a $199.0 million, or
62.1 percent, increase from the 2008
actual level. More than 70 percent of
the increase is related to information
technology and cash-services initiatives; the 2009 budget reflects the
CACHE project and initiatives by the
Federal Reserve Bank of New York to
enhance resiliency.6 The 2009 budget
also includes outlays for multi-year efforts to migrate applications off the
mainframe, including FedACH, Fedwire, and the internal accounting system.
As in previous years, the 2009 capital budget includes funding for projects
that support the strategic direction outlined by the individual Reserve Banks
6. The New York resiliency project, a multiyear project with total capital outlays of
$56.3 million, accounts for $43.4 million of the
2009 capital budget.

and the System. These strategies focus
on investments that improve operational
efficiencies, enhance services to Bank
customers, and ensure a safe and quality work environment. In support of
these strategies, the 2009 budget identifies seven categories of capital outlays:
building projects and facility improvements, payment system improvements,
cash-services initiatives, Treasury initiatives, information technology initiatives, security enhancements, and miscellaneous acquisitions.
The proposed capital budget includes
$179.2 million for building-related
projects and facility improvements. Of
the total building capital, $64.8 million
is related to major projects begun in
previous years in Boston, New York,
Philadelphia, Richmond, and St. Louis.
The remaining outlays in this category
will fund various building renovation
and refurbishment projects, as well as
miscellaneous facility improvement
projects.
Initiatives related to cash, payment
systems, and Treasury initiatives represent $182.4 million in the capital budget. Of this total, $72.6 million represents cash-services initiatives, including the CACHE development effort
($39.5 million) and the Systemwide upgrade of cash-processing machines
($21.0 million). The total capital budget
for payment systems initiatives is
$65.1 million and primarily is related to
the check-distribution computing platform project. The budget also includes
$44.7 million for reimbursable Treasury
initiatives, including support of the
Treasury Debt Management System,
CCMM-related efforts, and various
other initiatives.
The Reserve Banks and FRIT included $105.8 million in funding for
major information technology initiatives. These initiatives do not include
the automation components of building
or payment systems initiatives dis-

Federal Reserve Banks 23

cussed separately. Of the total automation-related outlays, FRIT projects
and acquisitions account for $25.6 million and New York Reserve Bank
projects, including resiliency, account
for $54.5 million. In addition, the budget includes $5.8 million in funding for
local server equipment at the Reserve
Banks.

The proposed capital budget includes
$48.7 million for security enhancements and $3.3 million for equipment
and software not falling into the defined
categories above.
Á

25

Chapter 4

Currency Budget
Federal Reserve Banks issue new and
fit currency to the public through depository institutions and destroy currency already in circulation as it becomes unfit or when a new design is
issued. Each year, under authority delegated by the Board, the director of the
Division of Reserve Bank Operations
and Payment Systems orders new currency from the U.S. Department of the
Treasury’s Bureau of Engraving and
Printing (BEP). Upon reviewing the order, the BEP establishes billing rates for
new currency, which the Board staff
uses to prepare the annual budget for
new currency. Once the Board approves
the new currency budget, it assesses the
costs of new currency to each Federal
Reserve Bank through an accounting

procedure similar to that used in assessing the costs of the Board’s operating
expenses to the Banks. Total new currency expenses for 2008 were under
budget by $102.0 million, or 16.9 percent, primarily because the BEP produced 899 million (10.8 percent) fewer
notes than budgeted.
The approved 2009 new currency
budget of $631.5 million is 26.2 percent higher than 2008 costs (chart 4.1).
Printing costs for Federal Reserve notes
represent 96 percent of the new currency budget, and expenses for
currency transportation, counterfeitdeterrence research, and the Treasury’s
Office of Compliance account for the
remaining 4 percent (table 4.1).

Chart 4.1
Federal Reserve Costs for New Currency, 1997−2009

NOTE: For 2009, budgeted.

26 Annual Report: Budget Review, 2009
Table 4.1
Federal Reserve Budget for New Currency, 2008 and 2009
Thousands of dollars, except as noted
Item

2008
(actual)

2009
(budgeted)

Percent
Change

Printing of new Federal Reserve Notes . . . . . . . . . . . . . . . . . . . . . . .
Currency transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Counterfeit-deterrence research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reimbursement to the U.S. Treasury’s Office of Compliance . .

477,870
15,034
3,686
3,812

606,070
17,145
4,240
4,022

26.8
14.0
15.0
5.5

Total cost of currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

500,402

631,477

26.2

Printing of Federal Reserve
Notes
The calendar-year 2009 currency order
will cost $606.1 million to print, a 26.8
percent increase from the cost for the
2008 order. The average billing rate increased 24 percent, from $69.66 in
2008 to $86.36 in 2009 (table 4.2); this
increase is influenced strongly by the
estimated cost for the Series 2004 $100
note, which accounts for about 19 percent of the 2009 order, and changes in
both print-order volume and denomination mix. In particular, we estimate that
the incremental cost to produce the
more-expensive Series 2004 $100 notes
accounts for 50 percent of the billing
rate increase and that BEP fixed costs
spread over the smaller print order will
account for an additional 33 percent.
Excluding these factors, the average
billing rate would have increased only

4 percent, to $72.48 per thousand notes.
In addition to the increase in billing
rates, the 2009 print budget is also
higher than 2008 costs because it contains a larger share of more-expensive
Series 2004 notes than did the 2008
budget. Series 2004 notes account for
49 percent of the calendar-year 2009
budget, compared with 46 percent of
the 2008 calendar-year budget (table
4.2). Specifically, the proposed 2009
budget includes 1.3 billion Series 2004
$100 notes at the billing rate of
$134.97 per thousand, amounting to
$178.4 million, or 29.4 percent, of the
total proposed printing costs for the
new currency budget.

Currency Transportation
The 2009 currency transportation budget is $17.1 million, which includes the

Table 4.2
Projected Federal Reserve Costs of Printing New Notes, by Type of Note, 2009
Type of note

Number of notes
(millions)

Percent of
total notes

Cost per thousand
notes (dollars)

Total cost
(thousands of
dollars)

Unthreaded ($1, $2) . . . . . . . . . . . . . . . .
Series 1996 ($100) . . . . . . . . . . . . . . . . .
Series 2004 . . . . . . . . . . . . . . . . . . . . . . .
$5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$20, $50. . . . . . . . . . . . . . . . . . . . . . . . .
$100e . . . . . . . . . . . . . . . . . . . . . . . . . . .
Volume-weighted average cost . . . . . .

2,745.6
851.2

39.1
12.1

52.68
97.23

144,638
82,762

780.8
140.8
1,177.6
1,321.6
...

11.1
2.0
16.8
18.8
...

90.08
93.50
99.18
134.97
86.36

70,334
13,165
116,794
178,376
...

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,017.6

100.0

...

606,070

NOTE: Components may not sum to totals and may not yield percentages because of rounding.
. . . Not applicable.
e Estimate.

Currency Budget 27

costs of shipping new currency from
the BEP to Reserve Banks ($10.2 million), of intra-System shipments of fit
and unprocessed currency ($6.9 million), and of returning currency pallets
to the BEP ($55,000).
The 2009 budget for currency transportation increased 14 percent from
2008 costs. The overall increase reflects
only a slight change in intra-System
shipment costs, but a 29.5 percent increase in new currency shipment costs.
Intra-System shipment carriers adjusted
costs throughout 2008 to reflect fuel
price changes. For budget planning purposes, therefore, we assumed no significant price changes in 2009 for intraSystem shipments. The new currency
shipment budget, however, increased
29.5 percent over 2008 expenses, primarily because we assumed significant
price increases for carriers that did not
seek fuel surcharge relief in 2008.

Counterfeit-Deterrence Research
The 2009 budget for counterfeitdeterrence research is $4.2 million,
which includes costs associated with
the Central Bank Counterfeit Deterrence Group (CBCDG) and the Reprographic Research Center (RRC). The
CBCDG operates under the auspices of
the G-10 central bank governors to

combat digital counterfeiting and includes 30 central banks. The Board’s
$4.2 million share of the 2009 CBCDG
budget, which accounts for 99 percent
of the Federal Reserve’s counterfeitdeterrence budget, is 15.2 percent
higher than the Board’s share of the
2008 CBCDG costs.1 Most of this increase is attributable to new research
initiatives and legal fees.

Reimbursement to the Treasury’s
Office of Compliance
The 2009 budget to reimburse expenses
to the Treasury’s Office of Compliance
(OC) is $4.0 million. The OC develops
Reserve Bank standards for cancellation
and destruction of unfit currency and
for note accountability; the OC also reviews Reserve Banks’ cash operations
for compliance with its standards. As a
public service, the OC also processes
claims for the redemption of damaged
or mutilated currency. The OC budget
increase of 5.5 percent results primarily
from increased travel costs.
Á
1. The estimated RRC payment of $35,000
represents the remaining 1 percent of the
counterfeit-deterrence research budget. The RRC
is a state-of-the-art facility hosted by the National
Bank of Denmark to conduct adversarial testing
of banknote designs and counterfeit-deterrent features for its 13 member countries.

Appendixes

31

Appendix A

Federal Reserve Budget Processes
The Board of Governors and the Federal Reserve Banks have separate budgets and separate budget processes.

directly to the Chairman for action by
the Board.

Federal Reserve Banks
Board of Governors
The Board’s budget covers a two-year
period. The budget process is as follows:
• Each Board division examines its operating environment and considers
whether any adjustments to its mission, priorities, activities, and associated resources might improve the efficiency and effectiveness of the
Board’s operations. A proposed budget based on Boardwide priorities and
planning assumptions is prepared for
each division.
• The divisions provide their proposed
budgets to the Staff Planning Group
(SPG), a group composed of seniorlevel officers from across the Board,
which develops a preliminary Boardwide budget. The Board’s Committee
on Board Affairs (CBA) then reviews
the preliminary budget and clarifies
outstanding planning issues with
SPG.
• The CBA submits the proposed budget to the Board for its consideration
and approval.
• If events warrant any changes to the
approved budget, the CBA seeks additional Board approval.
The Board’s Office of Inspector General (OIG), in keeping with its statutory
independence, prepares its proposed
budget apart from the Board’s budget.
The OIG presents its two-year budget

The Reserve Banks’ budgets cover one
year. Each year, each Bank establishes
major operating goals for the coming
year, devises strategies for attaining
those goals, estimates required resources, and monitors results. The
Banks’ budgets are structured by operational area, with support and overhead
attributable to each area charged to that
area.
The operations and financial performance of the Reserve Banks are monitored throughout the year by way of a
cost-accounting system, the Planning
and Control System (PACS). Under
PACS, the costs of all Bank services,
both priced and nonpriced, are grouped
by operational area, and the associated
costs of support and overhead are
charged to these areas accordingly.
PACS makes it possible to compare
budgets with actual expenses, and it facilitates comparison of the financial and
operating performances of the Banks.
During the budget year, the Banks must
submit proposals for major purchases
of assets to the Board for further
review and approval.
Following is a summary of the
Reserve Bank budget process:
• The business leaders in each functional area provide guidance to assist
the Banks as they develop their budget projections for the upcoming
year. The budget information is submitted to Board staff for review.

32 Annual Report: Budget Review, 2009

• Board staff review the Banks’ budgets, both individually and in the
context of Systemwide issues and
other Banks’ plans.
• The Committee on Federal Reserve
Bank Affairs is briefed on the Bank
budgets.

• The budgets are provided to the
members of the Board for final
action.

33

Appendix B

Priced Services
The Monetary Control Act of 1980 requires the Federal Reserve to charge
depository institutions for certain services. The fees charged for providing
these priced services are set to recover,
over the long run, all direct and indirect
costs of providing the services plus imputed costs, including the interest on
items credited before actual collection
(float) and the private-sector adjustment
factor (PSAF). To calculate the PSAF,
the Federal Reserve Banks impute the
costs that would have been incurred,
such as taxes that would have been
paid, and the profits that would have
been earned (return on equity) had the
priced services been provided by a
private business firm.

Annual Pricing Process
To meet the requirement for the full recovery of costs over the long run, the
Federal Reserve has developed an annual pricing process that involves projecting Reserve Bank expenses, volumes, and revenues, as well as the
PSAF and net income on clearing balances, for each service category.
Fees for Federal Reserve services
must be approved by the product director for the respective service, by the
Reserve Banks’ Financial Services
Policy Committee (FSPC), and, ultimately, by the Board of Governors.1

1. The product directors are those first vice
presidents at selected Reserve Banks with responsibility for day-to-day policy guidance over specific services. The FSPC is responsible for the
overall direction of financial services for the
Federal Reserve Banks.

The cost of float is projected by applying the federal funds rate to an estimate of the level of float to be generated in the coming year. The PSAF
targeted return-on-equity (ROE) capital
is based on a capital-asset pricing
model using data from the equity market as a whole. The ROE is applied to
the level of priced services equity that
is imputed to finance the assets the
Federal Reserve expects to use in providing priced services in the coming
year. Estimates of income taxes are
based on the tax rates derived from the
financial data of the 50 largest U.S.
bank holding companies, based on deposit balances.
The other components of the PSAF
are derived from the budgets of the Reserve Banks and the Board: the imputed
sales tax (based on budgeted outlays for
materials, supplies, and capital); the imputed assessment for insurance by the
Federal Deposit Insurance Corporation
(based on expected clearing balances
and amounts deferred to depository institutions for items deposited for collection with the Reserve Banks); and the
portion of the expenses of the Board of
Governors directly related to priced
services.2
To estimate net income on clearing
balances, the priced services investment
income is imputed and netted with related direct costs associated with clearing balances. The pro forma financial
statements for the priced services are
2. On March 31, 2009, the Board of Governors requested public comment on a proposal to
replace the current correspondent bank model underlying the PSAF calculation with a model
based on elements derived from publicly traded
firms more broadly.

34 Annual Report: Budget Review, 2009

presented in the 2008 Annual Report of
the Board of Governors of the Federal
Reserve System.
Á

35

Appendix C

Expenses and Employment
at the Board of Governors
Table C.1
Operating Expenses of the Board of Governors, by Division, Office, or Special Account,
2006−2009
Millions of dollars

Division, office, or special account

2006−07
(budgeted)

2006−07
(actual)

2008−09
(budgeted)

2008
(actual)

2008 actual
expenses
as percent
of the
2008−09
budget

Board Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Staff Director for Management . . . . . . . . . . . . . . . . . . . . . . .
Research and Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Monetary Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banking Supervision and Regulation . . . . . . . . . . . . . . . . .
Consumer and Community Affairs . . . . . . . . . . . . . . . . . . .
Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve Bank Operations and Payment Systems . . . . . .
Information Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Information Resources Management income account . .
Residual retirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Extraordinary items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26.4
12.4
16.8
82.7
32.0
28.4
99.4
29.5
26.1
51.4
91.2
122.2
−39.8
9.8
12.0
9.0

24.7
12.3
18.9
81.2
29.1
27.6
96.8
30.8
23.1
49.8
89.5
127.4
−39.5
13.5
7.9
8.3

30.2
14.6
21.6
98.7
36.7
33.8
106.0
38.2
29.4
58.5
105.8
148.4
−44.4
13.3
13.7
2.0

13.8
7.0
10.2
45.9
16.4
15.7
55.9
19.8
13.7
27.7
50.2
72.8
−23.2
11.1
8.7
0.1

45.8
48.2
47.1
46.5
44.8
46.6
52.8
51.9
46.5
47.3
47.5
49.0
52.2
83.3
63.4
6.3

Total, Board operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

609.5

601.4

706.3

345.9

49.0

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.

36 Annual Report: Budget Review, 2009
Table C.2
Operating Expenses of the Board of Governors, by Account Classification, 2006−2009
Millions of dollars, except as noted

Account classification

2006−07
(budgeted)

2006−07
(actual)

2008−09
(budgeted)

2008
(actual)

2008 actual
expenses as a
percent of the
2008−09
budget

Personnel services
Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

380.2
35.7
31.4
447.3

372.7
38.8
35.3
446.8

441.4
48.3
36.8
526.6

215.7
24.5
23.2
263.4

48.9
50.7
62.9
50.0

Goods and services
Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Postage and shipping . . . . . . . . . . . . . . . . . . . . .
Telecommunications . . . . . . . . . . . . . . . . . . . . . .
Printing and binding. . . . . . . . . . . . . . . . . . . . . .
Publications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stationery and supplies . . . . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . .
Rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Books and subscriptions . . . . . . . . . . . . . . . . . .
Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building repairs and alterations . . . . . . . . . . .
Furniture repairs and maintenance. . . . . . . . .
Contingency processing center expenses . . .
Contractual professional services . . . . . . . . . .
Tuition/registration and membership fees . .
Subsidies and contributions . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.7
1.0
10.8
2.7
1.2
2.3
14.6
7.5
1.2
2.0
7.8
4.6
2.5
1.7
62.8
4.8
1.3
28.8
−11.4
162.2

17.2
1.0
9.8
2.6
0.9
2.5
13.3
8.1
1.1
1.7
8.3
4.0
2.6
2.2
59.8
5.2
1.4
26.6
−13.7
154.6

18.5
1.1
11.6
2.8
1.1
2.3
15.8
8.7
4.9
2.2
8.5
4.8
2.7
2.3
67.9
6.5
1.2
29.8
−13.1
179.7

9.3
0.5
5.6
1.2
0.6
1.6
7.3
2.9
2.4
0.8
4.3
1.8
1.5
1.2
29.6
2.9
1.2
13.7
−6.0
82.5

50.4
42.2
48.7
42.9
56.9
68.8
46.0
33.0
49.2
38.1
51.0
36.2
54.4
53.8
43.7
44.8
101.5
46.1
46.1
45.9

Total, Board operations . . . . . . . . . . . . . . . . .

609.5

601.4

706.3

345.9

49.0

Office of Inspector General . . . . . . . . . . . . . . .

10.2

9.5

12.7

5.3

42.1

NOTE: Components may not sum to total and may not yield percentages shown because of rounding.
1. All other includes, among other items, Accounts, Risk and Credit (ARC) System expenses and income;
Information Resources Management income and user charges; and interest expenses.

Expenses and Employment at the Board of Governors 37
Table C.3
Positions Authorized at the Board of Governors, by Division, Office, or Special Account,
2006−20091
Position count
Division, office, or special account

2006−07
(initial)

2006−07
(ending)

2008−09
(initial)

2008
(ending)

Board Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Staff Director for Management . . . . . . . . . . . . . . . . . .
Research and Statistics . . . . . . . . . . . . . . . . . . . . . . . . .
International Finance . . . . . . . . . . . . . . . . . . . . . . . . . . .
Monetary Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banking Supervision and Regulation . . . . . . . . . . . .
Consumer and Community Affairs . . . . . . . . . . . . . .
Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve Bank Operations and Payment Systems .
Information Technology1 . . . . . . . . . . . . . . . . . . . . . . .
Management Division2 . . . . . . . . . . . . . . . . . . . . . . . . .

78
50
45
275
116
75
254
94
80
139
301
469

80
50
46
275
114
78
258
101
80
138
318
487

81
50
48
285
115
81
253
105
80
138
318
487

81
50
48
287
115
82
262
105
80
138
333
499

Total, Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,976

2,025

2,041

2,080

Office of Inspector General . . . . . . . . . . . . . . . . . . . . .

36

36

37

37

NOTE: Includes only those divisions, offices, and special accounts that have authorized position counts.
1. Includes positions that support the Federal Financial Institutions Examination Council for processing data
collected under the Home Mortgage Disclosure Act and the Community Reinvestment Act.
2. Excludes summer interns and youth positions.

39

Appendix D

Expenses and Employment
at the Federal Reserve Banks
Table D.1
Operating Expenses of the Federal Reserve Banks, by District, 2008 and 2009
Thousands of dollars, except as noted
Percent change
District

2008
(budgeted)

2008
(actual)

2009
(budgeted)

2008 actual
compared with
2008 budgeted

2009 budgeted
compared with
2008 actual

Boston . . . . . . . . . . . . . . . .
New York. . . . . . . . . . . . . .
Philadelphia. . . . . . . . . . . .
Cleveland . . . . . . . . . . . . . .
Richmond. . . . . . . . . . . . . .
Atlanta . . . . . . . . . . . . . . . .
Chicago . . . . . . . . . . . . . . .
St. Louis. . . . . . . . . . . . . . .
Minneapolis. . . . . . . . . . . .
Kansas City. . . . . . . . . . . .
Dallas . . . . . . . . . . . . . . . . .
San Francisco . . . . . . . . . .

157,796
599,736
157,028
218,332
245,270
355,650
277,736
227,877
168,218
181,033
190,820
287,474

154,255
613,746
157,418
214,317
237,070
354,951
264,647
216,098
160,552
175,546
193,304
278,860

153,479
646,993
152,724
171,007
283,005
387,155
274,078
222,717
154,652
169,232
182,399
288,730

−2.2
2.3
0.2
−1.8
−3.3
−0.2
−4.7
−5.2
−4.6
−3.0
1.3
−3.0

−0.5
5.4
−3.0
−20.2
19.4
9.1
3.6
3.1
−3.7
−3.6
−5.6
3.5

Total . . . . . . . . . . . . . . . . . .

3,066,970

3,020,763

3,086,172

−1.5

2.2

NOTE: Excludes capital outlays. Includes expenses budgeted by Federal Reserve Information Technology and the
Office of Employee Benefits. Components may not sum to totals and may not yield percentages shown because of
rounding.

40 Annual Report: Budget Review, 2009
Table D.2
Employment at the Federal Reserve Banks, by District, and at FRIT and OEB,
2008 and 2009
Average number of personnel
Change
District

2008
(budgeted)

2008
(actual)

2009
(budgeted)

Boston. . . . . . . . . . . . . . . . . . . . . . . . .
New York. . . . . . . . . . . . . . . . . . . . . .
Philadelphia. . . . . . . . . . . . . . . . . . . .
Cleveland . . . . . . . . . . . . . . . . . . . . . .
Richmond. . . . . . . . . . . . . . . . . . . . . .
Atlanta . . . . . . . . . . . . . . . . . . . . . . . .
Chicago . . . . . . . . . . . . . . . . . . . . . . .
St. Louis. . . . . . . . . . . . . . . . . . . . . . .
Minneapolis. . . . . . . . . . . . . . . . . . . .
Kansas City. . . . . . . . . . . . . . . . . . . .
Dallas . . . . . . . . . . . . . . . . . . . . . . . . .
San Francisco . . . . . . . . . . . . . . . . . .

1,000
2,764
1,063
1,581
1,827
1,939
1,457
1,074
1,235
1,330
1,316
1,781

959
2,775
1,022
1,516
1,739
1,890
1,404
1,020
1,178
1,323
1,277
1,721

899
2,877
1,009
1,367
1,638
1,776
1,339
964
1,082
1,213
1,235
1,686

−41
11
−41
−65
−88
−49
−53
−54
−57
−8
−39
−60

−60
102
−13
−149
−101
−114
−65
−56
−96
−110
−42
−35

Total, all Districts . . . . . . . . . . . . .

18,366

17,824

17,086

−542

−738

844

880

889

36

9

45

43

45

−2

2

19,255

18,747

18,020

−508

−727

Federal Reserve Information
Technology (FRIT). . . . . . . . . . .
Office of Employee Benefits
(OEB). . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . .

2008 actual
2009 budgeted
compared with compared with
2008 budgeted
2008 actual

NOTE: The term average number of personnel (ANP) describes levels and changes in employment. ANP is the
average number of employees in terms of full-time positions for the period. For instance, a full-time employee who
starts work on July 1 counts as 0.5 ANP for that calendar year; two half-time employees who start on January 1
count as 1 ANP. Components may not sum to totals and may not yield variances shown because of rounding.

Table D.3
Operating Expenses of the Federal Reserve Banks, FRIT, and OEB, by Operational Area,
2008 and 2009
Thousands of dollars, except as noted
Percent change
Operational area

Monetary and economic policy. .
Services to the U.S. Treasury
and other government
agencies . . . . . . . . . . . . . . . . . . . . .
Services to financial institutions
and the public . . . . . . . . . . . . . . .
Supervision and regulation. . . . . .
Fee-based services to financial
institutions. . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . .

2008
(budgeted)

2008
(actual)

2009
(budgeted)

2008 actual
2009 budgeted
compared with compared with
2008 budgeted
2008 actual

390,209

389,219

433,013

−0.3

11.3

449,530

440,669

442,978

−2.0

0.5

775,855
640,450

758,595
642,238

837,378
714,224

−2.2
0.3

10.4
11.2

810,926

790,043

658,578

−2.6

−16.6

3,066,970

3,020,763

3,086,172

−1.5

2.2

NOTE: Excludes capital outlays. Includes expenses budgeted by Federal Reserve Information Technology (FRIT)
and the Office of Employee Benefits (OEB). Components may not sum to totals and may not yield percentages
shown because of rounding.

Expenses and Employment at the Federal Reserve Banks 41
Table D.4
Employment at the Federal Reserve Banks, FRIT, and OEB, by Operational Area,
2008 and 2009
Average number of personnel
Change
Operational area

2008
(budgeted)

2008
(actual)

2009
(budgeted)

Monetary and economic policy. .
Services to the U.S. Treasury
and other government
agencies . . . . . . . . . . . . . . . . . . . . .
Services to financial institutions
and the public . . . . . . . . . . . . . . .
Supervision and regulation. . . . . .
Fee-based services to financial
institutions. . . . . . . . . . . . . . . . . . .
Support and overhead . . . . . . . . . .

1,018

1,010

1,067

−8

57

1,246

1,184

1,140

−62

−44

2,542
2,673

2,477
2,674

2,517
2,785

−66
1

40
111

2,155
9,621

1,936
9,468

1,033
9,478

−219
−154

−903
11

19,255

18,747

18,020

−508

−727

Total . . . . . . . . . . . . . . . . . . . . . . . . . .

2008 actual
2009 budgeted
compared with compared with
2008 budgeted
2008 actual

NOTE: Components may not sum to totals and may not yield variances shown because of rounding.
FRIT, Federal Reserve Information Technology; OEB, Office of Employee Benefits.

Table D.5
Expenses of the Federal Reserve Banks for Salaries of Officers and Employees,
by District, 2008 and 2009
Thouands of dollars, except as noted
Percent change
District

2008
(budgeted)

2008
(actual)

2009
(budgeted)

2008 actual
2009 budgeted
compared with compared with
2008 budgeted
2008 actual

Boston. . . . . . . . . . . . . . . . . . . . . . . . .
New York. . . . . . . . . . . . . . . . . . . . . .
Philadelphia. . . . . . . . . . . . . . . . . . . .
Cleveland . . . . . . . . . . . . . . . . . . . . . .
Richmond. . . . . . . . . . . . . . . . . . . . . .
Atlanta . . . . . . . . . . . . . . . . . . . . . . . .
Chicago . . . . . . . . . . . . . . . . . . . . . . .
St. Louis. . . . . . . . . . . . . . . . . . . . . . .
Minneapolis. . . . . . . . . . . . . . . . . . . .
Kansas City. . . . . . . . . . . . . . . . . . . .
Dallas . . . . . . . . . . . . . . . . . . . . . . . . .
San Francisco . . . . . . . . . . . . . . . . . .

81,081
290,068
70,018
90,268
119,432
130,154
108,595
73,310
74,819
89,354
81,949
142,469

77,869
294,537
68,500
86,987
116,117
129,229
104,910
71,378
72,757
87,847
80,516
139,621

78,925
325,011
71,544
85,802
119,514
130,786
111,039
73,757
73,570
87,848
83,535
146,594

−4.0
1.5
−2.2
−3.6
−2.8
−0.7
−3.4
−2.6
−2.8
−1.7
−1.7
−2.0

1.4
10.3
4.4
−1.4
2.9
1.2
5.8
3.3
1.1
0.0
3.7
5.0

Total, all Districts . . . . . . . . . . . . .

1,351,515

1,330,267

1,387,925

−1.6

4.3

Federal Reserve Information
Technology . . . . . . . . . . . . . . . . . .
Office of Employee Benefits . . . .

77,844
5,028

78,760
5,074

83,826
5,558

1.2
0.9

6.4
9.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . .

1,434,387

1,414,101

1,477,309

−1.4

4.5

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

42 Annual Report: Budget Review, 2009
Table D.6
Capital Outlays of the Federal Reserve Banks, by District, and of FRIT and OEB,
2008 and 2009
Thousands of dollars, except as noted
Percent change
District

2008
(budgeted)

2008
(actual)

2009
(budgeted)

Boston. . . . . . . . . . . . . . . . . . . . . . . . .
New York. . . . . . . . . . . . . . . . . . . . . .
Philadelphia. . . . . . . . . . . . . . . . . . . .
Cleveland . . . . . . . . . . . . . . . . . . . . . .
Richmond. . . . . . . . . . . . . . . . . . . . . .
Atlanta . . . . . . . . . . . . . . . . . . . . . . . .
Chicago . . . . . . . . . . . . . . . . . . . . . . .
St. Louis. . . . . . . . . . . . . . . . . . . . . . .
Minneapolis. . . . . . . . . . . . . . . . . . . .
Kansas City. . . . . . . . . . . . . . . . . . . .
Dallas . . . . . . . . . . . . . . . . . . . . . . . . .
San Francisco . . . . . . . . . . . . . . . . . .

28,439
138,452
22,615
24,817
69,707
22,889
23,768
33,298
7,008
16,193
25,776
56,691

21,441
47,390
12,598
12,042
63,352
10,668
18,858
26,525
7,465
21,297
8,722
33,871

27,241
154,713
21,648
11,669
32,224
36,735
23,259
21,507
10,444
7,152
29,729
62,239

−24.6
−65.8
−44.3
−51.5
−9.1
−53.4
−20.7
−20.3
6.5
31.5
−66.2
−40.3

27.0
226.5
71.8
−3.1
−49.1
244.3
23.3
−18.9
39.9
−66.4
240.8
83.8

Total, all Districts . . . . . . . . . . . . .

469,654

284,229

438,560

−39.5

54.3

64,908

35,920

79,758

−44.7

122.0

0

262

1,050

...

300.5

534,562

320,411

519,368

−40.1

62.1

Federal Reserve Information
Technology (FRIT). . . . . . . . . . .
Office of Employee Benefits
(OEB). . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . .

2008 actual
2009 budgeted
compared with compared with
2008 budgeted
2008 actual

NOTE: Components may not sum to totals and may not yield percentages shown because of rounding.
. . . Not applicable.

Table D.7
Capital Outlays of the Federal Reserve Banks, FRIT, and OEB, by Asset Classification,
2008 and 2009
Thousands of dollars, except as noted
Percent change
Asset classification

2008
(budgeted)

2008
(actual)

2009
(budgeted)

Equipment . . . . . . . . . . . . . . . . . . . . .
Furniture, furnishings, and
fixtures . . . . . . . . . . . . . . . . . . . . . .
Land and other real estate . . . . . .
Building . . . . . . . . . . . . . . . . . . . . . . .
Building machinery and
equipment . . . . . . . . . . . . . . . . . . .
Leasehold improvements. . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . .
Art . . . . . . . . . . . . . . . . . . . . . . . . . . . .

153,252

77,587

150,235

−49.4

93.6

24,725
9,197
203,431

16,351
3,873
129,708

24,789
4,415
147,069

−33.9
−57.9
−36.2

51.6
14.0
13.4

41,134
370
101,761
692

21,706
3,180
67,080
926

45,002
3,065
143,988
805

−47.2
759.5
−34.1
33.8

107.3
−3.6
114.7
−13.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . .

534,562

320,411

519,368

−40.1

62.1

2008 actual
2009 budgeted
compared with compared with
2008 budgeted
2008 actual

NOTE: Components may not sum to totals and may not yield percentages shown because of rounding.
FRIT, Federal Reserve Information Technology; OEB, Office of Employee Benefits.

Maps of the
Federal Reserve System

44 Annual Report: Budget Review, 2009

Maps of the Federal Reserve System

1

9
2

MINNEAPOLIS

7
12
SAN FRANCISCO

CHICAGO
CLEVELAND

10

NEW YORK
3PHILADELPHIA

4

KANSAS CITY
ST. LOUIS

8
11 DALLAS

BOSTON

RICHMOND

5

6ATLANTA

ALASKA
HAWAII

LEGEND
Both pages
I Federal Reserve Bank city
> Board of Governors of the Federal
Reserve System, Washington, D.C.

Facing Page
+ Federal Reserve Branch city
— Branch boundary

NOTE
The Federal Reserve officially identifies
Districts by number and Reserve Bank
city (shown on both pages) and by letter (shown on the facing page).
In the 12th District, the Seattle
Branch serves Alaska and the San Francisco Bank serves Hawaii.
The System serves commonwealths
and territories as follows: the New York

Bank serves the Commonwealth of
Puerto Rico and the U.S. Virgin Islands;
the San Francisco Bank serves American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands.
The maps show the boundaries within
the System as of year-end 2008.

Maps of the Federal Reserve System 45


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102