ar budgetrev 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 INTRODUCTION1 Summary of 2008 Income and Expenditures2 Operational Areas

The Budgets

Chapter 19 FEDERAL RESERVE SYSTEM

10 2009 System Budget Initiatives10 Trends in Expenses and Employment11 2009 Capital Budgets

Chapter 213 BOARD OF GOVERNORS13 2008–09 Budget14 2008 Budget Performance

Chapter 317 FEDERAL RESERVE BANKS18 2008 Budget Performance19 Initiatives Affecting the 2009 Budget20 Five-Year Trend in Reserve Bank Expenses21 2009 Personnel Expenses21 Risks in the 2009 Budget22 2009 Capital Plan

Chapter 425 CURRENCY BUDGET26 Printing of Federal Reserve Notes26 Currency Transportation27 Counterfeit-Deterrence Research27 Reimbursement to the Treasury’s Office of Compliance

Appendixes

Appendix A31 FEDERAL RESERVE BUDGET PROCESSES31 Board of Governors31 Federal Reserve Banks

Appendix B33 PRICED SERVICES33 Annual Pricing Process

Appendix C35 EXPENSES AND EMPLOYMENT AT THE BOARD OF GOVERNORS

Appendix D39 EXPENSES AND EMPLOYMENT AT THE FEDERAL RESERVE BANKS

Maps

44 MAPS OF THE FEDERAL RESERVE SYSTEM

Introduction

The Federal Reserve System—the na-tion’s central bank—consists of theBoard of Governors in Washington,D.C., the 12 Federal Reserve Bankswith their 24 branches distributedthroughout the nation, the Federal OpenMarket Committee (FOMC), and threeadvisory councils—the Federal Advi-sory Council, the Consumer AdvisoryCouncil, and the Thrift Institutions Ad-visory Council. The System was cre-ated in 1913 by the Congress to estab-lish a safe and flexible monetary andbanking system. Over the years, theCongress has given the Federal Reservemore authority and responsibility forachieving broad national economic andfinancial objectives.

The duties of the Federal Reservefall into four general areas: (1) conduct-ing the nation’s monetary policy by in-fluencing the monetary and credit con-ditions in the economy in the pursuit ofmaximum employment, stable prices,and moderate long-term interest rates;(2) supervising and regulating bankinginstitutions to ensure the safety andsoundness of the nation’s banking andfinancial system and to protect thecredit rights of consumers; (3) main-taining the stability of the financial sys-tem and containing systemic risk thatmay arise in financial markets; and(4) providing financial services to de-pository institutions, the U.S. govern-ment, and foreign official institutions.

The Federal Reserve System plays amajor role in the nation’s payment sys-tem. The Reserve Banks issue currencyand distribute coin; process Fedwire,automated clearinghouse, and securitiestransfers; and collect checks. In addi-tion, the Reserve Banks serve as thefiscal agents of the United States and

provide a variety of financial servicesfor the Treasury, other governmentagencies, and other fiscal principals.For a fuller discussion of the FederalReserve’s responsibilities, see theBoard publication The Federal ReserveSystem: Purposes & Functions.

Summary of 2008Income and Expenditures

In carrying out its responsibilities in2008, the Federal Reserve System in-curred $2.5 billion in net expenses.1 To-tal spending of $3.9 billion was offsetby $1.4 billion in revenue from pricedservices, claims for reimbursement, andother income. Total 2008 expenseswere $149.3 million, or 3.7 percent,less than the amount budgeted for 2008(table I.1).2

The major source of Reserve Bankincome is earnings from the portfolio ofU.S. government securities in the Sys-tem Open Market Account, totaling$27.5 billion in 2008. Earnings in ex-cess of expenses, dividends, and sur-plus are transferred to the U.S.

1. With this 2009 Annual Report: Budget Re-

view, there has been a change in the way ex-penses are presented: the costs of printing andtransporting currency, and related expenses, arenow included in total System expenses, to alignwith the presentation in the 2008 Annual Report

of the Board of Governors of the Federal Reserve

System. In past reports, currency expenses wereshown as a memo item.

2. Beginning with the 1998–99 budget, theBoard of Governors has operated on a two-yearbudget cycle and a four-year planning cycle.Given their business needs, the Federal ReserveBanks maintain an annual budget cycle. Formore information on the budget processes, seeappendix A.

1

Treasury—in 2008, a total of $31.7 bil-lion.3 (These net earnings are treated asreceipts in the U.S. budget accountingsystem and as anticipated earnings pro-jected by the Office of Managementand Budget in the U.S. budget.)

Operational Areas

In 2008, the Federal Reserve Systemaccounted for costs using the followingcategories: monetary and economicpolicy, supervision and regulation of fi-nancial institutions, services to financialinstitutions and the public, services tothe U.S. Treasury and other governmentagencies, and System policy directionand oversight.

Monetary and Economic Policy

The monetary and economic policy op-erational area encompasses Federal Re-serve actions to influence the availabil-ity and cost of money and credit in thenation’s economy. In 2008, the FederalOpen Market Committee held eightregularly scheduled meetings and ad-justed the federal funds rate seventimes.

A vast amount of banking and finan-cial data flows through the ReserveBanks to the Board, where the data arecompiled and made available to thepublic. The research staffs at the Boardand the Banks use the data, along withinformation collected by other publicand private institutions, to assess thestate of the economy and the relation-ships between the financial markets andeconomic activity. Staff members pro-vide background information to theBoard of Governors and at each meet-ing of the FOMC by preparing detailedeconomic and financial analyses andprojections for the domestic economyand international markets. The Boardand the FOMC use these analyses andprojections in setting reserve require-ments, setting the discount rate (whichaffects the cost of borrowing), and con-ducting open market operations. Staffmembers also conduct longer-run eco-nomic studies on regional, national, andinternational issues.

Supervision and Regulation ofFinancial Institutions

The Federal Reserve plays a major rolein the supervision and regulation ofbanks and bank holding companies.The Board of Governors adopts regula-tions to carry out statutory directives

3. For more detailed information on the in-come and the distribution of income, refer to theBoard’s 2008 Annual Report.

Table I.1Total Expenses of the Federal Reserve System, 2008

Millions of dollars, except as noted

Budgeted ActualVariance

Amount Percent

Reserve Banks . . . . . . . . . . . . . . . . . 3,067.0 3,020.8 −46.2 −1.5Board. . . . . . . . . . . . . . . . . . . . . . . . . . 352.31 351.2 −1.1 −0.3Currency. . . . . . . . . . . . . . . . . . . . . . . 602.4 500.4 −102.0 −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.

2 Annual Report: Budget Review, 2009

and establishes System supervisory andregulatory policies. The Reserve Banksconduct on-site examinations and in-spections of state member banks andbank holding companies; review appli-cations for mergers, acquisitions, andchanges in control from banks and bankholding companies; and take formal su-pervisory actions. In 2008, the FederalReserve conducted 486 examinations ofstate member banks (some of themjointly with state agencies), 500 exami-nations of large bank holding compa-nies, and 3,048 inspections of small,noncomplex bank holding companies; itacted on 1,057 proposals, representing1,910 individual applications involvingbank holding company formations andacquisitions, bank mergers, and othertransactions.

The Board also enforces complianceby state member banks and certain for-eign banking organizations with federallaws protecting consumers in their useof credit and deposit accounts. BetweenJuly 1, 2007, and June 30, 2008, theSystem conducted 268 consumer com-pliance examinations: 263 coveringstate member banks and five coveringforeign banking organizations. Alsoduring that period, the System con-ducted 243 Community ReinvestmentAct examinations.

The Board’s supervisory responsibili-ties also extend to the foreign opera-tions of U.S. banks and, under the In-ternational Banking Act, to the U.S.operations of foreign banks. Beyondthese activities, the Federal ReserveSystem maintains continuous oversightof the banking industry to ensure theoverall safety and soundness of the fi-nancial system. This broader responsi-bility is reflected in the System’s pres-ence in financial markets, through openmarket operations, and in its role aslender of last resort.

Services to Financial Institutionsand the Public

The Federal Reserve System plays acentral role in the nation’s payment sys-tems by ensuring that enough currencyand coin are in circulation to meet thepublic’s demand. The Federal ReserveBoard orders new currency from theBureau of Engraving and Printing, andthe Reserve Banks order new coin fromthe U.S. Mint. The Federal Reservepays for the printing and transportationof currency. The Reserve Banks issuecurrency and distribute coin to the pub-lic through depository institutions tomeet demand. The Reserve Banks alsoreceive deposits of currency and coinfrom depository institutions; identifysuspect counterfeit currency, whichthey forward to the U.S. Secret Service;and destroy currency that is unfit forcirculation. In 2008, the Reserve Banksissued approximately $732.1 billion incurrency, and they distributed $7.0 bil-lion in coin to depository institutions.The Reserve Banks also received ap-proximately $671.1 billion in currencyand $6.3 billion in coin from depositoryinstitutions and destroyed $148.5 bil-lion in unfit currency. In 2008, the costof printing and transporting currencywas $500.4 million.

The Reserve Banks also play a cen-tral role in the nation’s payment sys-tems by collecting checks and provid-ing a variety of electronic services fordepository institutions. In 2008, theBanks collected approximately 9.5 bil-lion commercial checks, with a totalvalue of about $15.2 trillion. TheBanks’ automated clearinghouse (ACH)service allows depository institutions tosend or receive credit transfers, such asdirect payroll payments and corporatepayments to vendors, and debit pay-ment transactions authorized by con-sumers, such as payments of insurancepremiums, mortgages, loans, and other

Introduction 3

bills from their accounts. In 2008, theReserve Banks processed approxi-mately 11.2 billion ACH transactions,valued at about $19.7 trillion. Approxi-mately 10 percent of the transactionswere for the federal government; the restwere for commercial establishments.

The Reserve Banks’ Fedwire FundsService allows participants in the ser-vice to use their balances at the Re-serve Banks to transfer funds to otherparticipants. In 2008, the Banks pro-cessed approximately 131 million Fed-wire funds transfers, valued at approxi-mately $755 trillion.

The Reserve Banks’ National Settle-ment Service allows participants in pri-vate clearing arrangements to settletransactions through their Federal Re-serve accounts. Approximately 42 localand national private arrangements, pri-marily check clearinghouse associa-tions, use the National Settlement Ser-vice. In 2008, the Banks processedmore than 468,000 settlement entriesfor these arrangements, with a debitvalue of more than $20.9 trillion.

The Reserve Banks’ Fedwire Securi-ties Service provides securities servicesto participants, including the settlementof book-entry transfers of securitiesissued by the U.S. Treasury, federalgovernment agencies, government-sponsored enterprises, and certain inter-national organizations. In 2008, par-ticipants originated approximately26 million transfers, valued at about$429 trillion.

Services to the U.S. Treasury andOther Government Agencies

Pursuant to the Federal Reserve Act,the Reserve Banks provide fiscalagency and depository services to theU.S. government and other fiscal prin-cipals. These services relate to securi-ties custody and transfer, payments,

deposits, and customer support. Thefederal government and other fiscalprincipals reimburse the Banks for thecost of providing these services. In2008, the Reserve Banks soughtreimbursement of approximately $461.1million. Reimbursement was receivedor is expected for all of the expensesincurred.4

The Reserve Banks issue, service,and redeem marketable Treasury securi-ties and savings bonds, and they pro-cess secondary-market Fedwire securi-ties transfers. In 2008, the Banksconducted 263 Treasury securities auc-tions and printed and mailed more than22 million savings bonds. The ReserveBanks operate two book-entry(computer-based) securities systems forthe custody of Treasury securities—theFedwire Securities Service and a sepa-rate computer application designed forretail investors who plan to hold thesesecurities until maturity. Almost allbook-entry Treasury securities aremaintained on Fedwire, which is alsothe nation’s principal securities-transfermechanism.

The Reserve Banks collect and dis-burse funds on behalf of the federalgovernment. They maintain the Trea-sury’s bank account, accept deposits,pay checks drawn on the Treasury’s ac-count, and make Fedwire and auto-mated clearinghouse payments for theTreasury. In 2008, the Banks continuedto assist the Treasury in its efforts to re-ceive and make payments electroni-cally. For example, they operate thePay.gov Internet portal, which enablesthe public to make payments to theTreasury and other federal governmentagencies over the Internet.

4. The Reserve Banks are required by the Fed-eral Reserve Act to serve as fiscal agents and de-positories of the United States. By statute, theDepartment of the Treasury has appropriations topay for these services.


The Reserve Banks also provide fis-cal agency and depository services toother domestic and international enti-ties. Depending on the authority underwhich the services are provided, theBanks may maintain book-entry ac-counts of securities; provide custodyfor the stock of unissued, definitive(physical) securities; maintain and up-date balances of outstanding book-entryand definitive securities for issuers; andmaintain related funds accounts.

System Policy Directionand Oversight

This operational area encompasses ac-tivities by the Board of Governors insupervising Board and Reserve Bankprograms. At the Reserve Bank level,the expenses for these activities areconsidered support and are thereforeallocated across the other operationalareas. Á

Introduction 5

The Budgets

Chapter 1

Federal Reserve System

Total net expenses for the Federal Re-serve System for 2009 are budgetedat $4,084.4 million, an increase of5.5 percent from 2008 actual expenses.Of this total, $3,086.2 million is for theReserve Banks, $366.7 million is forthe Board of Governors, and $631.5 mil-lion is for the cost of new currency(tables 1.1 and 1.2).1 Revenue frompriced services provided to depositoryinstitutions is expected to total $692.4million, or 17 percent of total budgetedexpenses. This revenue, combined withclaims for reimbursement and other in-come, results in the recovery of 28 per-cent of the System’s budgeted 2009 ex-penses.2 When these items are deducted

from budgeted 2009 expenses, net ex-penses of the System are 15.5 percenthigher than 2008 net expenses (table1.1), primarily because of a decline inpriced services revenue and an increasein currency costs.

The distribution of budgeted ex-penses is similar to that in previousyears, with the Reserve Banks’ ex-penses accounting for 76 percent of thetotal, new currency expenses accountingfor 15 percent, and Board expenses ac-counting for the remainder (chart 1.1).

System employment is budgeted at20,018 for 2009, a decrease of 727from the 2008 level, largely because ofplanned staff reductions by the ReserveBanks.

1. The Board of Governors budgets on a two-year cycle; in this chapter, 2009 values shown forthe System and the Board reflect the estimatedsecond-year effect of the Board’s 2008-09 budget.

2. Claims for reimbursement refers to costs offiscal agency and depository services provided tothe U.S. Treasury, other government agencies,

and other fiscal principals that are billed to theseagencies. Other income comes from services pro-vided on behalf of the U.S. Treasury that are paidfor by the depository institutions using the ser-vices, which include the transfer of funds be-tween depository institutions and the Treasury.

Table 1.1Total Expenses of the Federal Reserve System, Net of Receipts and Claims forReimbursement, 2007−2009


Item2007

(actual)2008

(actual)2009

(budgeted)

Percent change

2007 to 2008 2008 to 2009

Total System expenses1 . . . . . . . . . . . . . 3,883.02 3,872.4 4,084.4 −0.3 5.5

LESS

Revenue from priced services. . . . . 1,012.4 873.8 692.4 −13.7 −20.8Other income . . . . . . . . . . . . . . . . . . . . 1.4 1.3 1.3 −9.5 0.0Claims for reimbursement3 . . . . . . . 458.2 461.1 461.7 0.6 0.1

EQUALS

Net System expenses . . . . . . . . . . . . 2,411.12 2,536.2 2,929.0 5.2 15.5

NOTE: Components may not sum to totals and may not yield percentages shown because of rounding. Totalexpenses 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: thecosts of printing and transporting currency, and related expenses, are now included in total System expenses, toalign with the presentation in the Board’s 2008 Annual Report. Relevant figures for 2007 and 2008 also includecurrency 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.

9

2009 System Budget Initiatives

The Reserve Bank budgets are fundingincreases in the central bank functions,specifically monetary policy and publicprograms, supervision and regulationfunctions, and cash operations, offsetby reductions in the check operations.The major factors affecting the 2009Reserve Bank budgets are outlined inmore detail in chapter 3.

Trends inExpenses and Employment

From the actual 2000 level to the bud-geted 2009 amount, the total expensesof the Federal Reserve System have in-creased an average of 3.8 percent peryear (1.2 percent per year when ad-justed for inflation) (chart 1.2). Overthe same period, nondefense discretion-

Chart 1.1Distribution of Budgeted Expenses of theFederal Reserve System, 2009

Chart 1.2Total Expenses of the Federal ReserveSystem, 2000−2009

NOTE: Expenses for 2007 have been restated so that allyears include Office of Inspector General expenses andextraordinary items. For all years, includes the costs ofnew currency. For 2009, budgeted.

1. Calculated with GDP price deflator.

Table 1.2Expenses of the Federal Reserve System for Operations and Currency, 2007−2009


Item2007

(actual)2008

(actual)2009

(budgeted)

Percent change

2007 to 2008 2008 to 2009

Reserve Banks1 . . . . . . . . . . . . . . . . 2,983.5 3,020.8 3,086.2 1.3 2.2Personnel. . . . . . . . . . . . . . . . . . . . 2,013.7 2,021.3 2,102.4 0.4 4.0Nonpersonnel . . . . . . . . . . . . . . . . 969.8 999.5 983.8 3.1 −1.6

Board of Governors2 . . . . . . . . . . . 323.53 351.2 366.7 8.6 4.4Personnel. . . . . . . . . . . . . . . . . . . . 237.13 268.2 274.1 13.1 2.2Nonpersonnel . . . . . . . . . . . . . . . . 86.43 83.0 92.6 −3.9 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 shownbecause 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.


ary spending by the federal governmenthas increased an average of 6.0 percentper year (chart 1.3). Over the2000−2009 period, Federal ReserveSystem employment has decreased4,853 (chart 1.4).

The primary factors influencing bothReserve Bank spending restraint andthe substantial staffing decreases overthe past 10 years have been restructur-ing efforts in the check-processingfunction and efficiency measures in thesupport and overhead functions. Overthe same ten-year period, check costsdecreased an average of 4.3 percent andthe staffing level declined an average of11.9 percent annually as a result of in-creased efficiencies and investments intechnology. Local support and overheadcosts increased an average of 1.6 per-cent annually and the staffing level de-

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

2009 Capital Budgets

The capital budgets for the ReserveBanks and the Board total $550.3 mil-lion, with $519.4 million budgeted forthe Reserve Banks and Federal ReserveInformation Technology (FRIT) and$30.9 million budgeted for the Board.As in previous years, the 2009 capitalbudgets include funding for projectsthat support the strategic direction out-lined by the individual Reserve Banks,System business leaders, and the Board.These strategic goals focus on invest-ments that continue to improve opera-tional efficiencies, enhance services tobank customers, and ensure a safe,high-quality work environment. Moredetailed discussions of the Board andReserve Bank capital budgets are in-cluded in chapters 2 and 3, respectively.

Chart 1.3Cumulative Change in Federal ReserveSystem Expenses and Federal GovernmentExpenses, 2000−2009

NOTE: For 2009, budgeted.1. Discretionary spending less expenditures on de-

fense. Source: Budget of the United States Government,

Fiscal Year 2009: Historical Tables, Table 8.1 Outlaysby Budget Enforcement Act Category, 1962−2013.

2. Includes the cost of new currency and Office of In-spector General expenses and extraordinary items.

Chart 1.4Employment in the Federal ReserveSystem, 2000−2009

NOTE: For 2009, budgeted.

Federal Reserve System 11

Chapter 2

Board of Governors

The Board of Governors operates undera two-year budget. The budget for2008–09 was approved in December2007 and subsequently amended inApril 2009.

2008–09 Budget

Board of Governors

The Board’s approved operating budgetfor 2008–09 was originally set at$706.3 million—$526.6 million (74.6percent) for salaries and benefits andthe remaining $179.7 million for goodsand services (table 2.1; also see appen-dix C). The Board’s approved capitalbudget for 2008–09 was $47.8 million,representing funds to be used primarilyto replace or upgrade computing sys-tems, renovate aging facilities, and ex-pand office space to accommodateworkforce growth.

In 2009, $30.1 million, or 4.3 per-cent, was added to the Board’s operat-ing budget, bringing the two-year bud-

get to $736.4 million. The increase inoperating funds was driven by the ex-traordinary demands put on Board staff,Board operations, and technology sup-port related to the financial crisis. De-mands for information and technologyand general services support have in-creased in order to provide real-timeanalysis and make changes to reportsfrequently based on new or revisedregulatory and lending practices. Therehave been no changes to the Board’scapital budget.

Office of Inspector General

In keeping with its statutory indepen-dence, the Office of Inspector General(OIG) prepares its proposed budgetapart from the Board’s budget and pre-sents it directly to the Chairman of theBoard of Governors for Board mem-bers’ consideration. The OIG’s 2008–09operating budget was $12.7 million.During 2009, an additional $1.3 million

Table 2.1Operating Expenses and Capital Expenditures of the Board of Governors, 2006−2009


Operational area orOffice of Inspector General

2006−07(budgeted)

2006−07(actual)

2008−09(budgeted)

2008(actual)

2008 actualexpenses asa percent ofthe 2008−09

budget

Monetary and economic policy. . . . . . . . . . . . . . 143.1 137.9 169.1 78.1 46.2Supervisory, regulatory, and legal services . . . 206.4 200.5 232.0 117.1 50.5Federal Reserve System policy direction. . . . . 55.6 55.9 66.3 31.0 46.7Support and security services . . . . . . . . . . . . . . . 195.4 198.8 236.9 119.6 50.5Extraordinary items . . . . . . . . . . . . . . . . . . . . . . . . 9.0 8.3 2.0 0.1 6.3

Total, Board operations . . . . . . . . . . . . . . . . . . . 609.5 601.4 706.3 345.9 49.0

Total, capital1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.4 24.7 47.8 8.9 18.6

Office of Inspector General . . . . . . . . . . . . . . . . 10.2 9.5 12.7 5.3 42.1

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

13

was added, bringing the two-year bud-get to $14.0 million. The capital budgetincreased by $11,000.

Authorized Positions

At the beginning of the 2008-09 budgetcycle, the Board had 2,041 authorizedpositions (table 2.2). The number of au-thorized positions for the OIG was 37.

To meet increased workload de-mands, the Board added 39 positions in2008. In 2009, the Board added another63 positions, bringing the total autho-rized positions to 2,143. The OIG’s to-tal authorized positions remained at 37during 2008, but 8 positions wereadded during 2009.

Areas of Risk

Despite careful planning, future devel-opments could necessitate resources be-yond those currently approved. Ex-amples of such developments include

• significant changes in or shocks tothe economy or financial system thatcreate a material increase in work-load,

• heavier workload required by laws,decisions to expand or modify centralbank operations, or compliance re-quirements,

• pressure in key areas requiring addi-tional salary or benefit packages inorder for the Board to remain com-petitive, and

• an unforeseen external event requir-ing additional security or contingencyenhancements.

2008 Budget Performance

Board of Governors

The Board’s 2008 operating expensestotaled $345.9 million. Personnel-related expenses totaled $263.4 million,or 2.1 percent over the $258.0 millionbudgeted for the first half of the bien-nium. Expenses for goods and servicestotaled $82.5 million, or 6.4 percent be-low the $88.1 million budgeted. Theunderage was due to lower-than-expected expenses for contractual pro-fessional services, repairs, and furnitureand equipment. Capital expenditures for2008 totaled $8.9 million, or 62.0 per-cent below the $23.4 million budgeted,primarily because of changes in thetiming of several capital projects.

Table 2.2Positions Authorized at the Board of Governors, 2006−2009

Operational area orOffice of Inspector General

Position count

2006−07(initial)

2006−07(ending)

2008−09(initial)

2008(ending)

Monetary and economic policy. . . . . . . . . . . . . . 466 467 481 484Supervisory, regulatory, and legal services . . . 567 577 576 585Federal Reserve System policy direction. . . . . 173 176 179 179Support and security services1 . . . . . . . . . . . . . . 770 805 805 832Extraordinary items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total, Board operations . . . . . . . . . . . . . . . . . . . 1,976 2,025 2,041 2,080

Office of Inspector General . . . . . . . . . . . . . . . . 36 36 37 37

1. Includes summer interns and youth positions and positions that support the Federal Financial InstitutionsExamination Council for processing data collected under the Home Mortgage Disclosure Act and the CommunityReinvestment Act.

. . . Not applicable.


Office of Inspector General

OIG expenses for 2008 totaled $5.3million, compared with a budgetedamount of $6.2 million. Á

Board of Governors 15

Chapter 3

Federal Reserve Banks

The 2009 operating budgets of the 12Reserve Banks total $3,086.2 million.1

The 2009 total is $65.4 million, or 2.2percent, above 2008 actual expenses.This growth is driven by increases incentral bank functions, specifically re-lated to growth in monetary policy andpublic programs, supervision and regu-lation, and cash operations. These in-creases are significantly offset by de-creases in priced services due largely tothe decline in paper-check volume, as aresult of the electronification of checkservices, and the associated reductionsin the check-processing infrastructure.

Budgeted net expenses for 2009, af-ter revenue and reimbursements, are ex-pected to increase by $246.1 million, or

14.6 percent, over 2008 actual net ex-penses (table 3.1). Nearly 40 percent ofReserve Bank expenses in the 2009budget are offset by priced service rev-enues (22 percent) and reimbursableclaims for services provided to theTreasury and other agencies (15 per-cent).2 Budgeted 2009 priced servicesrevenue is lower than the 2008 actuallevel, primarily as a result of decliningpaper-check volume. Reimbursableclaims are expected to increase onlyslightly in 2009, reflecting an ongoingeffort by the Treasury and the ReserveBanks to contain costs while maintain-ing support for key programs andadvancing new initiatives.

1. These expenses include those budgeted byFederal Reserve Information Technology (FRIT)and the Office of Employee Benefits (OEB) thatare chargeable to the Reserve Banks.

2. Reimbursable claims include costs of fiscalagency and depository services provided to theU.S. Treasury, other government agencies, andother fiscal principals that are billed to and reim-bursed by these agencies.

Table 3.1Operating Expenses of the Federal Reserve Banks, Net of Receipts and Claims forReimbursement, 2008 and 2009


Item2008

(actual)2009

(budgeted)

Change

Amount Percent

Total operating expenses. . . . . . . . . . . . . . . . 3,020.8 3,086.2 65.4 2.2

LESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Revenue from priced services. . . . . . . . . 873.8 692.4 −181.4 −20.8Other income . . . . . . . . . . . . . . . . . . . . . . . . 1.3 1.3 0.0 0.0Claims for reimbursement1 . . . . . . . . . . . 461.1 461.7 0.6 0.1

EQUALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Net expenses . . . . . . . . . . . . . . . . . . . . . . . . 1,684.6 1,930.8 246.1 14.6

NOTE: Excludes capital outlays. Includes expenses budgeted by Federal Reserve Information Technology andOffice 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 ofrounding. 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, andother fiscal principals that are billed to these agencies.

17

Total 2009 projected employment forthe Reserve Banks, FRIT, and OEB is18,020 ANP, a decrease of 727 ANP, or3.9 percent, from the 2008 actual stafflevel (table 3.2).3 The 2009 staffing de-crease continues the trend of workforcereductions that began in the late 1990s;the staffing level is the lowest in thepast 30 years. The 2009 budgeted staffreductions are largely due to the effectof infrastructure changes and paper-check volume declines, slightly offsetby staffing increases in central bankfunctions.

2008 Budget Performance

Total 2008 actual expenses are $3,020.8million, which represents a decrease of$46.2 million, or 1.5 percent, from theapproved 2008 budget of $3,067.0 mil-lion. Total 2008 actual staffing of18,747 ANP represents a decrease of508 ANP from 2008 budgeted levels of19,255 ANP.

The expense decrease compared tobudget was driven in part by the accel-erated closing of check-processing sites

in 2008. System check-service costs de-creased $17.3 million, or 2.7 percent,because of significant cost-containmentefforts and a reduction in resourcescommensurate with the faster-than-expected decline in paper-check vol-umes. In 2007, the Reserve Banksplanned to reduce check-processingsites from 22 to 4 by 2011 but nowplan to contract to one full-service pa-per check-processing site by late 2009or early 2010.

Also contributing to the underrun is adecrease in cash operation costs of$16.5 million, or 3.7 percent, under theapproved 2008 budget. The underrunreflects lower personnel costs of $6.4million, including lower staffing levelsin response to volume declines and de-lays in equipment upgrades of $2.7 mil-lion. Timing shifts in projects accountfor the majority of the remainder of theunderrun. Treasury services were underbudget by $8.8 million, or 2.0 percent,largely as a result of the Treasury WebApplication Infrastructure (TWAI) opti-mization program, an effort to identifyefficiencies and cost savings, and delaysin the Treasury’s Collections and CashManagement Modernization (CCMM)initiative.4

3. ANP is the average number of employees interms of full-time positions for the period. For in-stance, a full-time employee who works one-halfof the year counts as 0.5 ANP for that calendaryear; two half-time employees who work the fullyear count as 1 ANP.

4. CCMM is a comprehensive multi-year en-terprise architecture initiative to streamline, mod-ernize, and improve the services, systems, and

Table 3.2Employment at the Federal Reserve Banks, FRIT, and OEB, 2008 and 2009

Average number of personnel, except as noted

Item2008

(actual)2009

(budgeted)

Change

Amount Percent

Reserve Banks . . . . . . . . . . . . . . . . . . . . . . . . . 17,824 17,086 −738 −4.1Federal Reserve Information

Technology (FRIT). . . . . . . . . . . . . . . . . . . 880 889 9 1.0Office of Employee Benefits (OEB) . . . . . 43 45 2 4.7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,747 18,020 −727 −3.9

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


Partially offsetting the underrun wereincreased expenses in the supervisionand regulation area. Expenses wereover budget by $1.8 million, or 0.3 per-cent, for enhanced automationresources.

The underrun of 508 ANP, as com-pared with the approved budget, reflectslower staffing in several areas. Checkoperations are 295 ANP under budgetbecause of higher-than-projected vol-ume declines. Treasury services is 62ANP below budget, reflecting theCCMM initiative and volume reduc-tions. Cash operations is 43 ANP underbudget, primarily because of volumedeclines and productivity gains. The fa-cilities management function is 32 ANPunder budget because of outsourcedhousekeeping in one district and re-duced building and housekeeping needsin some of the Branch operations. Effi-ciencies and hiring delays in several ar-eas account for the remaining staff re-ductions.

Initiatives Affectingthe 2009 Budget

For 2009, the Reserve Banks’ budgetsreflect funding for several initiativesthat will address financial stability anddeteriorating banking conditions as wellas enhance resiliency. The 2009 budgetalso supports the Reserve Banks’ effortsto modernize and increase efficienciesin both the cash and check areas.

Central Bank Services

In the central bank area, which includesmonetary policy, public programs, su-

pervision and regulation, and cash op-erations, expenses are increasing$194.6 million, or 10.9 percent, in2009. The staffing level is increasing208 ANP, in part because of the full-year effect of staff additions in 2008and personnel needed to support resil-iency efforts. Total costs for monetarypolicy and public programs are increas-ing $54.1 million, or 10.4 percent,driven primarily by salary-related costsand resiliency enhancements in centralbank functions and other aspects ofopen market operations.

The budget for the supervision andregulation function is increasing$72.0 million, or 11.2 percent, over ac-tual 2008 expenses, primarily for addi-tional resources to address financial sta-bility issues and increased supervisionneeds. The staffing level is increasingby 111 ANP.

Expenses in cash operations are in-creasing $48.5 million, or 11.3 percent.The Currency and Coin Handling Envi-ronment (CACHE) project and in-creased support charges, primarily forbuilding and protection services, aredriving the increase.5 These expensesare slightly offset by staffing reductionsresulting from lower-than-expectedvolumes.

Treasury-Related Functions

The budget for services to the Treasury,which are fully reimbursed, are increas-ing $2.3 million, or 0.5 percent. TheCCMM initiative, which transitionedseveral Treasury business lines to

processes supporting the Treasury’s collectionsand cash-management programs. The goal is toimprove efficiency and reduce costs to the Trea-sury, which provides a savings to the taxpayers.

5. The CACHE project was formerly namedthe Future Cash Automation Project (FCAP). Theaim of CACHE is to develop and deploy a newcash software application and technical architec-ture in the Federal Reserve Banks to streamlineoperations, improve controls, provide more robustdata-management tools, and present a more stan-dardized face to the customer.

Federal Reserve Banks 19

private-sector financial agents at theend of 2008, and continued volume de-clines in Treasury retail securities, gov-ernment checks, and postal money or-ders will reduce costs and the staffinglevel, which will decline by 44 ANP.These reductions are largely offset byincreased charges from FRIT and theTWAI. Expenses related to the TWAIare increasing as the number of applica-tions hosted in the infrastructure ex-pands in connection with the CCMMinitiative.

Priced Services

Total check expenses are decreasing$145.1 million, or 23.6 percent, be-cause of check-restructuring costs rec-ognized in 2008, the accelerated re-structuring changes planned for 2009,and continued paper-check volume de-clines. In response to the continuing de-cline in paper-check volumes, the Re-serve Banks recently decided that,likely by late 2009 or early 2010, theFederal Reserve Bank of Cleveland willserve as the System’s single paper-check processing and adjustments siteand that the Federal Reserve Bank ofAtlanta will serve as the System’ssingle electronic-check processing site.The check staffing level is decreasing1,039 ANP as a result of these actions.Despite these cost reduction efforts, theReserve Banks have budgeted a recov-ery rate of 92.3 percent in 2009. TheReserve Banks will be reviewing addi-tional steps needed to meet long-termcost-recovery objectives. The otherpriced services provided by the FederalReserve—including operating an auto-mated clearinghouse (ACH) service,transferring funds and securities, andproviding a multilateral settlementservice—did not result in any major ex-pense or staffing initiatives in the 2009budget.

Support Services

Support costs are increasing $51.6 mil-lion, or 5.8 percent. The expense in-creases are driven primarily by in-creases for information technology($30.5 million) and law enforcement($7.1 million), mainly in salary-relatedcosts. The staffing level is increasing106 ANP to support application devel-opment and server and data centeroperations.

Five-Year Trend in Reserve BankExpenses

Total expenses for the Reserve Bankshave grown an average of 4.2 percentannually over the past five years.

Central Bank Services

Central bank services have grown anaverage of 8.0 percent annually overthe past five years. The increase is pri-marily in the monetary policy and pub-lic programs areas, where expenseshave grown on average 9.6 percent an-nually; the Banks have increased re-sources dedicated to community out-reach, financial literacy, and regionaleconomic research efforts. Expenses inthe supervision and regulation functionhave grown an average of 8.1 percentannually over the past five years, re-flecting the need for additional re-sources to recruit and retain staff withspecialized skills, to implement theBasel II capital accord, and, more re-cently, to address financial market tur-moil and deteriorating banking and eco-nomic conditions. There have beenongoing efficiency improvements in thecash area over the past five years.Overall, however, expenses in cash op-erations have increased an average of5.0 percent annually, reflecting in-


creased costs to modernize the cash-processing and inventory-tracking infra-structure and higher support costs,particularly protection costs.

Treasury Services

Treasury services expenses have grownon average 4.8 percent annually since2004. Recent efforts by the Treasury tolimit expense growth and delays insome projects have resulted in modest2009 budgeted growth from 2008 ac-tual expenses. The growth from 2004 to2007 was driven primarily by the ex-pansion of the TWAI to host a growingnumber of Treasury applications.

Priced Services

Priced services expenses have been de-clining an average of 4.2 percent annu-ally, driven by the check service. Ef-forts to reduce the size of the System’scheck operations, consistent with de-clining volumes, have resulted in an av-erage annual decline of 7.2 percent incheck-service costs since 2004. Thedownward trend in check expenses re-flects staff reductions of 2,873 ANPsince 2004.

2009 Personnel Expenses

Budgeted officer and employee salariesand other personnel expenses for 2009total $1,613.0 million, representing anincrease of $59.3 million, or 3.8 per-cent, compared with 2008 actual ex-penses. The increase represents thecombined effect of the budgeted salaryadministration program, including thestaff reductions mentioned previously,partially offset by reductions in staff re-lated to restructuring and consolidation.Funding for officer and employee salary

administration programs reflects an in-crease of $72.1 million. The increase isdue largely to base-salary programs;merit pools for officers and employeestotal $52.7 million, and promotions andmarket-based salary adjustments total$19.4 million. The merit budget reflectsweighted-average increases of 4.2 per-cent and 4.0 percent in base salaries forofficers and employees, respectively.Variable pay programs are increasing$18 million in 2009. The increase pri-marily is attributed to an increase invariable pay pools, which average12.3 percent for officers, 5.2 percent forexempt staff, and 1.6 percent for non-exempt staff.

The 2009 employee turnover projec-tion of 13.3 percent reflects continuedSystem downsizing, particularly in thecheck area. Excluding positions thatwill not be replaced (36 percent of thetotal), employee turnover is 8.6 percent.The Reserve Banks project 6.1 percentofficer turnover in 2009, 5.3 percent af-ter excluding positions that will not bereplaced.

Risks in the 2009 Budget

There are several risks in the 2009 bud-get. The ongoing challenges in the fi-nancial industry and the broadereconomy present a considerable amountof risk. Additional staff will be neededto meet the supervision and regulationchallenges presented by the current de-clining banking and economic condi-tions as well as to support the emer-gency liquidity facilities. In addition,there is uncertainty about the resourceneeds resulting from any further marketevents or new legislation that mightaffect the Federal Reserve’s responsi-bilities.

Cash and Treasury project changesand delays could increase budgeted ex-penses. The ongoing CACHE develop-


ment effort poses risks to the 2009 bud-get, as project details continue to berefined and as business resources tosupport the implementation are fully as-sessed. Unforeseen requests from theTreasury or changes in project scopeand direction could add costs and re-quire additional resources in 2009. Inconnection with the CCMM initiative,the Treasury continues to refine its fu-ture vision for collections, payments,and cash-management systems, alongwith the timing of different componentsof the project. These efforts create arisk because of the potential changes inproject timing and scope. In addition tothe expense risks mentioned above, un-forseen delays or changes in the devel-opment of the new Check 21 platformcould pose a risk to the 2009 capitalbudget.

2009 Capital Plan

The 2009 capital budget submitted bythe Reserve Banks and FRIT totals$519.4 million, a $199.0 million, or62.1 percent, increase from the 2008actual level. More than 70 percent ofthe increase is related to informationtechnology and cash-services initia-tives; the 2009 budget reflects theCACHE project and initiatives by theFederal Reserve Bank of New York toenhance resiliency.6 The 2009 budgetalso includes outlays for multi-year ef-forts to migrate applications off themainframe, including FedACH, Fed-wire, and the internal accounting sys-tem.

As in previous years, the 2009 capi-tal budget includes funding for projectsthat support the strategic direction out-lined by the individual Reserve Banks

and the System. These strategies focuson investments that improve operationalefficiencies, enhance services to Bankcustomers, and ensure a safe and qual-ity work environment. In support ofthese strategies, the 2009 budget identi-fies seven categories of capital outlays:building projects and facility improve-ments, payment system improvements,cash-services initiatives, Treasury initia-tives, information technology initia-tives, security enhancements, and mis-cellaneous acquisitions.

The proposed capital budget includes$179.2 million for building-relatedprojects and facility improvements. Ofthe total building capital, $64.8 millionis related to major projects begun inprevious years in Boston, New York,Philadelphia, Richmond, and St. Louis.The remaining outlays in this categorywill fund various building renovationand refurbishment projects, as well asmiscellaneous facility improvementprojects.

Initiatives related to cash, paymentsystems, and Treasury initiatives repre-sent $182.4 million in the capital bud-get. Of this total, $72.6 million rep-resents cash-services initiatives, in-cluding the CACHE development effort($39.5 million) and the Systemwide up-grade of cash-processing machines($21.0 million). The total capital budgetfor payment systems initiatives is$65.1 million and primarily is related tothe check-distribution computing plat-form project. The budget also includes$44.7 million for reimbursable Treasuryinitiatives, including support of theTreasury Debt Management System,CCMM-related efforts, and variousother initiatives.

The Reserve Banks and FRIT in-cluded $105.8 million in funding formajor information technology initia-tives. These initiatives do not includethe automation components of buildingor payment systems initiatives dis-

6. The New York resiliency project, a multi-year project with total capital outlays of$56.3 million, accounts for $43.4 million of the2009 capital budget.


cussed separately. Of the total auto-mation-related outlays, FRIT projectsand acquisitions account for $25.6 mil-lion and New York Reserve Bankprojects, including resiliency, accountfor $54.5 million. In addition, the bud-get includes $5.8 million in funding forlocal server equipment at the ReserveBanks.

The proposed capital budget includes$48.7 million for security enhance-ments and $3.3 million for equipmentand software not falling into the definedcategories above. Á


Chapter 4

Currency Budget

Federal Reserve Banks issue new andfit currency to the public through de-pository institutions and destroy cur-rency already in circulation as it be-comes unfit or when a new design isissued. Each year, under authority del-egated by the Board, the director of theDivision of Reserve Bank Operationsand Payment Systems orders new cur-rency from the U.S. Department of theTreasury’s Bureau of Engraving andPrinting (BEP). Upon reviewing the or-der, the BEP establishes billing rates fornew currency, which the Board staffuses to prepare the annual budget fornew currency. Once the Board approvesthe new currency budget, it assesses thecosts of new currency to each FederalReserve Bank through an accounting

procedure similar to that used in assess-ing the costs of the Board’s operatingexpenses to the Banks. Total new cur-rency expenses for 2008 were underbudget by $102.0 million, or 16.9 per-cent, primarily because the BEP pro-duced 899 million (10.8 percent) fewernotes than budgeted.

The approved 2009 new currencybudget of $631.5 million is 26.2 per-cent higher than 2008 costs (chart 4.1).Printing costs for Federal Reserve notesrepresent 96 percent of the new cur-rency budget, and expenses forcurrency transportation, counterfeit-deterrence research, and the Treasury’sOffice of Compliance account for theremaining 4 percent (table 4.1).

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

NOTE: For 2009, budgeted.

25

Printing of Federal ReserveNotes

The calendar-year 2009 currency orderwill cost $606.1 million to print, a 26.8percent increase from the cost for the2008 order. The average billing rate in-creased 24 percent, from $69.66 in2008 to $86.36 in 2009 (table 4.2); thisincrease is influenced strongly by theestimated cost for the Series 2004 $100note, which accounts for about 19 per-cent of the 2009 order, and changes inboth print-order volume and denomina-tion mix. In particular, we estimate thatthe incremental cost to produce themore-expensive Series 2004 $100 notesaccounts for 50 percent of the billingrate increase and that BEP fixed costsspread over the smaller print order willaccount for an additional 33 percent.Excluding these factors, the averagebilling rate would have increased only

4 percent, to $72.48 per thousand notes.In addition to the increase in billingrates, the 2009 print budget is alsohigher than 2008 costs because it con-tains a larger share of more-expensiveSeries 2004 notes than did the 2008budget. Series 2004 notes account for49 percent of the calendar-year 2009budget, compared with 46 percent ofthe 2008 calendar-year budget (table4.2). Specifically, the proposed 2009budget 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 thetotal proposed printing costs for thenew currency budget.

Currency Transportation

The 2009 currency transportation bud-get is $17.1 million, which includes the

Table 4.1Federal Reserve Budget for New Currency, 2008 and 2009

Thousands of dollars, except as noted

Item2008

(actual)2009

(budgeted)PercentChange

Printing of new Federal Reserve Notes . . . . . . . . . . . . . . . . . . . . . . . 477,870 606,070 26.8Currency transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,034 17,145 14.0Counterfeit-deterrence research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,686 4,240 15.0Reimbursement to the U.S. Treasury’s Office of Compliance . . 3,812 4,022 5.5

Total cost of currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,402 631,477 26.2

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

Type of noteNumber of notes

(millions)Percent oftotal notes

Cost per thousandnotes (dollars)

Total cost(thousands of

dollars)

Unthreaded ($1, $2) . . . . . . . . . . . . . . . . 2,745.6 39.1 52.68 144,638Series 1996 ($100) . . . . . . . . . . . . . . . . . 851.2 12.1 97.23 82,762Series 2004 . . . . . . . . . . . . . . . . . . . . . . .

$5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 780.8 11.1 90.08 70,334$10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140.8 2.0 93.50 13,165$20, $50. . . . . . . . . . . . . . . . . . . . . . . . . 1,177.6 16.8 99.18 116,794$100e . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,321.6 18.8 134.97 178,376

Volume-weighted average cost . . . . . . . . . . . . 86.36 . . .

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.


costs of shipping new currency fromthe BEP to Reserve Banks ($10.2 mil-lion), of intra-System shipments of fitand unprocessed currency ($6.9 mil-lion), and of returning currency palletsto the BEP ($55,000).

The 2009 budget for currency trans-portation increased 14 percent from2008 costs. The overall increase reflectsonly a slight change in intra-Systemshipment costs, but a 29.5 percent in-crease in new currency shipment costs.Intra-System shipment carriers adjustedcosts throughout 2008 to reflect fuelprice changes. For budget planning pur-poses, therefore, we assumed no sig-nificant price changes in 2009 for intra-System shipments. The new currencyshipment budget, however, increased29.5 percent over 2008 expenses, pri-marily because we assumed significantprice increases for carriers that did notseek fuel surcharge relief in 2008.

Counterfeit-Deterrence Research

The 2009 budget for counterfeit-deterrence research is $4.2 million,which includes costs associated withthe Central Bank Counterfeit Deter-rence Group (CBCDG) and the Repro-graphic Research Center (RRC). TheCBCDG operates under the auspices ofthe G-10 central bank governors to

combat digital counterfeiting and in-cludes 30 central banks. The Board’s$4.2 million share of the 2009 CBCDGbudget, which accounts for 99 percentof the Federal Reserve’s counterfeit-deterrence budget, is 15.2 percenthigher than the Board’s share of the2008 CBCDG costs.1 Most of this in-crease is attributable to new researchinitiatives and legal fees.

Reimbursement to the Treasury’sOffice of Compliance

The 2009 budget to reimburse expensesto the Treasury’s Office of Compliance(OC) is $4.0 million. The OC developsReserve Bank standards for cancellationand destruction of unfit currency andfor note accountability; the OC also re-views Reserve Banks’ cash operationsfor compliance with its standards. As apublic service, the OC also processesclaims for the redemption of damagedor mutilated currency. The OC budgetincrease of 5.5 percent results primarilyfrom increased travel costs. Á

1. The estimated RRC payment of $35,000represents the remaining 1 percent of thecounterfeit-deterrence research budget. The RRCis a state-of-the-art facility hosted by the NationalBank of Denmark to conduct adversarial testingof banknote designs and counterfeit-deterrent fea-tures for its 13 member countries.

Currency Budget 27

Appendixes

Appendix A

Federal Reserve Budget Processes

The Board of Governors and the Fed-eral Reserve Banks have separate bud-gets and separate budget processes.

Board of Governors

The Board’s budget covers a two-yearperiod. The budget process is as fol-lows:

• Each Board division examines its op-erating environment and considerswhether any adjustments to its mis-sion, priorities, activities, and associ-ated resources might improve the ef-ficiency and effectiveness of theBoard’s operations. A proposed bud-get based on Boardwide priorities andplanning assumptions is prepared foreach division.

• The divisions provide their proposedbudgets to the Staff Planning Group(SPG), a group composed of senior-level officers from across the Board,which develops a preliminary Board-wide budget. The Board’s Committeeon Board Affairs (CBA) then reviewsthe preliminary budget and clarifiesoutstanding planning issues withSPG.

• The CBA submits the proposed bud-get to the Board for its considerationand approval.

• If events warrant any changes to theapproved budget, the CBA seeks ad-ditional Board approval.

The Board’s Office of Inspector Gen-eral (OIG), in keeping with its statutoryindependence, prepares its proposedbudget apart from the Board’s budget.The OIG presents its two-year budget

directly to the Chairman for action bythe Board.

Federal Reserve Banks

The Reserve Banks’ budgets cover oneyear. Each year, each Bank establishesmajor operating goals for the comingyear, devises strategies for attainingthose goals, estimates required re-sources, and monitors results. TheBanks’ budgets are structured by opera-tional area, with support and overheadattributable to each area charged to thatarea.

The operations and financial perfor-mance of the Reserve Banks are moni-tored throughout the year by way of acost-accounting system, the Planningand Control System (PACS). UnderPACS, the costs of all Bank services,both priced and nonpriced, are groupedby operational area, and the associatedcosts of support and overhead arecharged to these areas accordingly.PACS makes it possible to comparebudgets with actual expenses, and it fa-cilitates comparison of the financial andoperating performances of the Banks.During the budget year, the Banks mustsubmit proposals for major purchasesof assets to the Board for furtherreview and approval.

Following is a summary of theReserve Bank budget process:

• The business leaders in each func-tional area provide guidance to assistthe Banks as they develop their bud-get projections for the upcomingyear. The budget information is sub-mitted to Board staff for review.

31

• Board staff review the Banks’ bud-gets, both individually and in thecontext of Systemwide issues andother Banks’ plans.

• The Committee on Federal ReserveBank Affairs is briefed on the Bankbudgets.

• The budgets are provided to themembers of the Board for finalaction.


Appendix B

Priced Services

The Monetary Control Act of 1980 re-quires the Federal Reserve to chargedepository institutions for certain ser-vices. The fees charged for providingthese priced services are set to recover,over the long run, all direct and indirectcosts of providing the services plus im-puted costs, including the interest onitems credited before actual collection(float) and the private-sector adjustmentfactor (PSAF). To calculate the PSAF,the Federal Reserve Banks impute thecosts that would have been incurred,such as taxes that would have beenpaid, and the profits that would havebeen earned (return on equity) had thepriced services been provided by aprivate business firm.

Annual Pricing Process

To meet the requirement for the full re-covery of costs over the long run, theFederal Reserve has developed an an-nual pricing process that involves pro-jecting Reserve Bank expenses, vol-umes, and revenues, as well as thePSAF and net income on clearing bal-ances, for each service category.

Fees for Federal Reserve servicesmust be approved by the product direc-tor for the respective service, by theReserve Banks’ Financial ServicesPolicy Committee (FSPC), and, ulti-mately, by the Board of Governors.1

The cost of float is projected by ap-plying the federal funds rate to an esti-mate of the level of float to be gener-ated in the coming year. The PSAFtargeted return-on-equity (ROE) capitalis based on a capital-asset pricingmodel using data from the equity mar-ket as a whole. The ROE is applied tothe level of priced services equity thatis imputed to finance the assets theFederal Reserve expects to use in pro-viding priced services in the comingyear. Estimates of income taxes arebased on the tax rates derived from thefinancial data of the 50 largest U.S.bank holding companies, based on de-posit balances.

The other components of the PSAFare derived from the budgets of the Re-serve Banks and the Board: the imputedsales tax (based on budgeted outlays formaterials, supplies, and capital); the im-puted assessment for insurance by theFederal Deposit Insurance Corporation(based on expected clearing balancesand amounts deferred to depository in-stitutions for items deposited for collec-tion with the Reserve Banks); and theportion of the expenses of the Board ofGovernors directly related to pricedservices.2

To estimate net income on clearingbalances, the priced services investmentincome is imputed and netted with re-lated direct costs associated with clear-ing balances. The pro forma financialstatements for the priced services are

1. The product directors are those first vicepresidents at selected Reserve Banks with respon-sibility for day-to-day policy guidance over spe-cific services. The FSPC is responsible for theoverall direction of financial services for theFederal Reserve Banks.

2. On March 31, 2009, the Board of Gover-nors requested public comment on a proposal toreplace the current correspondent bank model un-derlying the PSAF calculation with a modelbased on elements derived from publicly tradedfirms more broadly.

33

presented in the 2008 Annual Report ofthe Board of Governors of the FederalReserve System. Á


Appendix C

Expenses and Employment

at the Board of Governors

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

Millions of dollars

Division, office, or special account2006−07

(budgeted)2006−07(actual)

2008−09(budgeted)

2008(actual)

2008 actualexpensesas percent

of the2008−09budget

Board Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.4 24.7 30.2 13.8 45.8Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4 12.3 14.6 7.0 48.2Staff Director for Management . . . . . . . . . . . . . . . . . . . . . . . 16.8 18.9 21.6 10.2 47.1Research and Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.7 81.2 98.7 45.9 46.5International Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.0 29.1 36.7 16.4 44.8Monetary Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.4 27.6 33.8 15.7 46.6Banking Supervision and Regulation . . . . . . . . . . . . . . . . . 99.4 96.8 106.0 55.9 52.8Consumer and Community Affairs . . . . . . . . . . . . . . . . . . . 29.5 30.8 38.2 19.8 51.9Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.1 23.1 29.4 13.7 46.5Reserve Bank Operations and Payment Systems . . . . . . 51.4 49.8 58.5 27.7 47.3Information Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91.2 89.5 105.8 50.2 47.5Management Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122.2 127.4 148.4 72.8 49.0Information Resources Management income account . . −39.8 −39.5 −44.4 −23.2 52.2Residual retirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.8 13.5 13.3 11.1 83.3Special projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.0 7.9 13.7 8.7 63.4Extraordinary items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.0 8.3 2.0 0.1 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.

35

Table C.2Operating Expenses of the Board of Governors, by Account Classification, 2006−2009


Account classification2006−07

(budgeted)2006−07(actual)

2008−09(budgeted)

2008(actual)

2008 actualexpenses as apercent of the

2008−09budget

Personnel servicesSalaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380.2 372.7 441.4 215.7 48.9Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.7 38.8 48.3 24.5 50.7Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.4 35.3 36.8 23.2 62.9

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447.3 446.8 526.6 263.4 50.0

Goods and servicesTravel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.7 17.2 18.5 9.3 50.4Postage and shipping . . . . . . . . . . . . . . . . . . . . . 1.0 1.0 1.1 0.5 42.2Telecommunications . . . . . . . . . . . . . . . . . . . . . . 10.8 9.8 11.6 5.6 48.7Printing and binding. . . . . . . . . . . . . . . . . . . . . . 2.7 2.6 2.8 1.2 42.9Publications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 0.9 1.1 0.6 56.9Stationery and supplies . . . . . . . . . . . . . . . . . . . 2.3 2.5 2.3 1.6 68.8Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.6 13.3 15.8 7.3 46.0Furniture and equipment . . . . . . . . . . . . . . . . . . 7.5 8.1 8.7 2.9 33.0Rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 1.1 4.9 2.4 49.2Books and subscriptions . . . . . . . . . . . . . . . . . . 2.0 1.7 2.2 0.8 38.1Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8 8.3 8.5 4.3 51.0Building repairs and alterations . . . . . . . . . . . 4.6 4.0 4.8 1.8 36.2Furniture repairs and maintenance. . . . . . . . . 2.5 2.6 2.7 1.5 54.4Contingency processing center expenses . . . 1.7 2.2 2.3 1.2 53.8Contractual professional services . . . . . . . . . . 62.8 59.8 67.9 29.6 43.7Tuition/registration and membership fees . . 4.8 5.2 6.5 2.9 44.8Subsidies and contributions . . . . . . . . . . . . . . . 1.3 1.4 1.2 1.2 101.5Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.8 26.6 29.8 13.7 46.1All other1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . −11.4 −13.7 −13.1 −6.0 46.1

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162.2 154.6 179.7 82.5 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.


Table C.3Positions Authorized at the Board of Governors, by Division, Office, or Special Account,2006−20091

Division, office, or special account

Position count

2006−07(initial)

2006−07(ending)

2008−09(initial)

2008(ending)

Board Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 80 81 81Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 50 50 50Staff Director for Management . . . . . . . . . . . . . . . . . . 45 46 48 48Research and Statistics . . . . . . . . . . . . . . . . . . . . . . . . . 275 275 285 287International Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 114 115 115Monetary Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 78 81 82Banking Supervision and Regulation . . . . . . . . . . . . 254 258 253 262Consumer and Community Affairs . . . . . . . . . . . . . . 94 101 105 105Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 80 80 80Reserve Bank Operations and Payment Systems . 139 138 138 138Information Technology1 . . . . . . . . . . . . . . . . . . . . . . . 301 318 318 333Management Division2 . . . . . . . . . . . . . . . . . . . . . . . . . 469 487 487 499

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.

Expenses and Employment at the Board of Governors 37

Appendix D

Expenses and Employment

at the Federal Reserve Banks

Table D.1Operating Expenses of the Federal Reserve Banks, by District, 2008 and 2009


District2008

(budgeted)2008

(actual)2009

(budgeted)

Percent change

2008 actualcompared with2008 budgeted

2009 budgetedcompared with

2008 actual

Boston . . . . . . . . . . . . . . . . 157,796 154,255 153,479 −2.2 −0.5New York. . . . . . . . . . . . . . 599,736 613,746 646,993 2.3 5.4Philadelphia. . . . . . . . . . . . 157,028 157,418 152,724 0.2 −3.0Cleveland . . . . . . . . . . . . . . 218,332 214,317 171,007 −1.8 −20.2Richmond. . . . . . . . . . . . . . 245,270 237,070 283,005 −3.3 19.4Atlanta . . . . . . . . . . . . . . . . 355,650 354,951 387,155 −0.2 9.1Chicago . . . . . . . . . . . . . . . 277,736 264,647 274,078 −4.7 3.6St. Louis. . . . . . . . . . . . . . . 227,877 216,098 222,717 −5.2 3.1Minneapolis. . . . . . . . . . . . 168,218 160,552 154,652 −4.6 −3.7Kansas City. . . . . . . . . . . . 181,033 175,546 169,232 −3.0 −3.6Dallas . . . . . . . . . . . . . . . . . 190,820 193,304 182,399 1.3 −5.6San Francisco . . . . . . . . . . 287,474 278,860 288,730 −3.0 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 theOffice of Employee Benefits. Components may not sum to totals and may not yield percentages shown because ofrounding.

39

Table D.2Employment at the Federal Reserve Banks, by District, and at FRIT and OEB,2008 and 2009

Average number of personnel

District2008

(budgeted)2008

(actual)2009

(budgeted)

Change



2008 actual

Boston. . . . . . . . . . . . . . . . . . . . . . . . . 1,000 959 899 −41 −60New York. . . . . . . . . . . . . . . . . . . . . . 2,764 2,775 2,877 11 102Philadelphia. . . . . . . . . . . . . . . . . . . . 1,063 1,022 1,009 −41 −13Cleveland . . . . . . . . . . . . . . . . . . . . . . 1,581 1,516 1,367 −65 −149Richmond. . . . . . . . . . . . . . . . . . . . . . 1,827 1,739 1,638 −88 −101Atlanta . . . . . . . . . . . . . . . . . . . . . . . . 1,939 1,890 1,776 −49 −114Chicago . . . . . . . . . . . . . . . . . . . . . . . 1,457 1,404 1,339 −53 −65St. Louis. . . . . . . . . . . . . . . . . . . . . . . 1,074 1,020 964 −54 −56Minneapolis. . . . . . . . . . . . . . . . . . . . 1,235 1,178 1,082 −57 −96Kansas City. . . . . . . . . . . . . . . . . . . . 1,330 1,323 1,213 −8 −110Dallas . . . . . . . . . . . . . . . . . . . . . . . . . 1,316 1,277 1,235 −39 −42San Francisco . . . . . . . . . . . . . . . . . . 1,781 1,721 1,686 −60 −35

Total, all Districts . . . . . . . . . . . . . 18,366 17,824 17,086 −542 −738

Federal Reserve InformationTechnology (FRIT). . . . . . . . . . . 844 880 889 36 9

Office of Employee Benefits(OEB). . . . . . . . . . . . . . . . . . . . . . . 45 43 45 −2 2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 19,255 18,747 18,020 −508 −727

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

Table D.3Operating Expenses of the Federal Reserve Banks, FRIT, and OEB, by Operational Area,2008 and 2009


Operational area2008

(budgeted)2008

(actual)2009

(budgeted)

Percent change



2008 actual

Monetary and economic policy. . 390,209 389,219 433,013 −0.3 11.3Services to the U.S. Treasury

and other governmentagencies . . . . . . . . . . . . . . . . . . . . . 449,530 440,669 442,978 −2.0 0.5

Services to financial institutionsand the public . . . . . . . . . . . . . . . 775,855 758,595 837,378 −2.2 10.4

Supervision and regulation. . . . . . 640,450 642,238 714,224 0.3 11.2Fee-based services to financial

institutions. . . . . . . . . . . . . . . . . . . 810,926 790,043 658,578 −2.6 −16.6

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 (FRIT)and the Office of Employee Benefits (OEB). Components may not sum to totals and may not yield percentagesshown because of rounding.


Table D.4Employment at the Federal Reserve Banks, FRIT, and OEB, by Operational Area,2008 and 2009

Average number of personnel

Operational area2008

(budgeted)2008

(actual)2009

(budgeted)

Change



2008 actual

Monetary and economic policy. . 1,018 1,010 1,067 −8 57Services to the U.S. Treasury

and other governmentagencies . . . . . . . . . . . . . . . . . . . . . 1,246 1,184 1,140 −62 −44

Services to financial institutionsand the public . . . . . . . . . . . . . . . 2,542 2,477 2,517 −66 40

Supervision and regulation. . . . . . 2,673 2,674 2,785 1 111Fee-based services to financial

institutions. . . . . . . . . . . . . . . . . . . 2,155 1,936 1,033 −219 −903Support and overhead . . . . . . . . . . 9,621 9,468 9,478 −154 11

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 19,255 18,747 18,020 −508 −727

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.5Expenses of the Federal Reserve Banks for Salaries of Officers and Employees,by District, 2008 and 2009

Thouands of dollars, except as noted

District2008

(budgeted)2008

(actual)2009

(budgeted)

Percent change



2008 actual

Boston. . . . . . . . . . . . . . . . . . . . . . . . . 81,081 77,869 78,925 −4.0 1.4New York. . . . . . . . . . . . . . . . . . . . . . 290,068 294,537 325,011 1.5 10.3Philadelphia. . . . . . . . . . . . . . . . . . . . 70,018 68,500 71,544 −2.2 4.4Cleveland . . . . . . . . . . . . . . . . . . . . . . 90,268 86,987 85,802 −3.6 −1.4Richmond. . . . . . . . . . . . . . . . . . . . . . 119,432 116,117 119,514 −2.8 2.9Atlanta . . . . . . . . . . . . . . . . . . . . . . . . 130,154 129,229 130,786 −0.7 1.2Chicago . . . . . . . . . . . . . . . . . . . . . . . 108,595 104,910 111,039 −3.4 5.8St. Louis. . . . . . . . . . . . . . . . . . . . . . . 73,310 71,378 73,757 −2.6 3.3Minneapolis. . . . . . . . . . . . . . . . . . . . 74,819 72,757 73,570 −2.8 1.1Kansas City. . . . . . . . . . . . . . . . . . . . 89,354 87,847 87,848 −1.7 0.0Dallas . . . . . . . . . . . . . . . . . . . . . . . . . 81,949 80,516 83,535 −1.7 3.7San Francisco . . . . . . . . . . . . . . . . . . 142,469 139,621 146,594 −2.0 5.0

Total, all Districts . . . . . . . . . . . . . 1,351,515 1,330,267 1,387,925 −1.6 4.3

Federal Reserve InformationTechnology . . . . . . . . . . . . . . . . . . 77,844 78,760 83,826 1.2 6.4

Office of Employee Benefits . . . . 5,028 5,074 5,558 0.9 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.

Expenses and Employment at the Federal Reserve Banks 41

Table D.6Capital Outlays of the Federal Reserve Banks, by District, and of FRIT and OEB,2008 and 2009


District2008

(budgeted)2008

(actual)2009

(budgeted)

Percent change



2008 actual

Boston. . . . . . . . . . . . . . . . . . . . . . . . . 28,439 21,441 27,241 −24.6 27.0New York. . . . . . . . . . . . . . . . . . . . . . 138,452 47,390 154,713 −65.8 226.5Philadelphia. . . . . . . . . . . . . . . . . . . . 22,615 12,598 21,648 −44.3 71.8Cleveland . . . . . . . . . . . . . . . . . . . . . . 24,817 12,042 11,669 −51.5 −3.1Richmond. . . . . . . . . . . . . . . . . . . . . . 69,707 63,352 32,224 −9.1 −49.1Atlanta . . . . . . . . . . . . . . . . . . . . . . . . 22,889 10,668 36,735 −53.4 244.3Chicago . . . . . . . . . . . . . . . . . . . . . . . 23,768 18,858 23,259 −20.7 23.3St. Louis. . . . . . . . . . . . . . . . . . . . . . . 33,298 26,525 21,507 −20.3 −18.9Minneapolis. . . . . . . . . . . . . . . . . . . . 7,008 7,465 10,444 6.5 39.9Kansas City. . . . . . . . . . . . . . . . . . . . 16,193 21,297 7,152 31.5 −66.4Dallas . . . . . . . . . . . . . . . . . . . . . . . . . 25,776 8,722 29,729 −66.2 240.8San Francisco . . . . . . . . . . . . . . . . . . 56,691 33,871 62,239 −40.3 83.8

Total, all Districts . . . . . . . . . . . . . 469,654 284,229 438,560 −39.5 54.3

Federal Reserve InformationTechnology (FRIT). . . . . . . . . . . 64,908 35,920 79,758 −44.7 122.0

Office of Employee Benefits(OEB). . . . . . . . . . . . . . . . . . . . . . . 0 262 1,050 . . . 300.5

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 534,562 320,411 519,368 −40.1 62.1

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

Table D.7Capital Outlays of the Federal Reserve Banks, FRIT, and OEB, by Asset Classification,2008 and 2009


Asset classification2008

(budgeted)2008

(actual)2009

(budgeted)

Percent change



2008 actual

Equipment . . . . . . . . . . . . . . . . . . . . . 153,252 77,587 150,235 −49.4 93.6Furniture, furnishings, and

fixtures . . . . . . . . . . . . . . . . . . . . . . 24,725 16,351 24,789 −33.9 51.6Land and other real estate . . . . . . 9,197 3,873 4,415 −57.9 14.0Building . . . . . . . . . . . . . . . . . . . . . . . 203,431 129,708 147,069 −36.2 13.4Building machinery and

equipment . . . . . . . . . . . . . . . . . . . 41,134 21,706 45,002 −47.2 107.3Leasehold improvements. . . . . . . . 370 3,180 3,065 759.5 −3.6Software . . . . . . . . . . . . . . . . . . . . . . . 101,761 67,080 143,988 −34.1 114.7Art . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692 926 805 33.8 −13.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 534,562 320,411 519,368 −40.1 62.1

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

Maps of the Federal Reserve System

LEGEND

Both pagesn 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 identifiesDistricts by number and Reserve Bankcity (shown on both pages) and by let-ter (shown on the facing page).

In the 12th District, the SeattleBranch serves Alaska and the San Fran-cisco Bank serves Hawaii.

The System serves commonwealthsand territories as follows: the New York

Bank serves the Commonwealth ofPuerto Rico and the U.S. Virgin Islands;the San Francisco Bank serves Ameri-can Samoa, Guam, and the Common-wealth of the Northern Mariana Islands.The maps show the boundaries withinthe System as of year-end 2008.

CHICAGO

K CANSAS ITY

HAWAII

ALASKA

MINNEAPOLIS

DALLAS

S FAN RANCISCO

S LT. OUIS

CLEVELAND

RICHMOND

ATLANTA

PHILADELPHIA

N YEW ORK

BOSTON

10

12

11

9

86

7

1

2

3

5

4


Maps of the Federal Reserve System 45

ar budgetrev 2009

Documents