If the Fed is audited, what might we find that they are doing which would be bad?

Here is some detailed excerpts from the recent GAO audit, I linked to above. Click the link if you want more detail. Click its audited financial statements if you want pages of detail as to exact what assets and liabilities it has and its income and expenses and where its money goes.

Page 38:

The Federal Reserve System and Its Emergency Activities Were Subject to Multiple Audits and Reviews


The Emergency Programs Have All Been Subject to Audits and Reviews

The Federal Reserve Act requires the Federal Reserve Board to order an
annual independent audit of the financial statements of each of the 12
Reserve Banks.57 Each Reserve Bank prepares annual financial
statements that reflect its financial position as of the end of the calendar
year and its related income and expenses for the year. The Federal
Reserve Board also prepares combined financial statements of the
Reserve Banks, which include the accounts and results of operations of
the 12 Reserve Banks. As shown in figure 2, the loans and other financial
assistance provided through the Federal Reserve’s emergency programs
are recorded in the Reserve Banks’ publicly reported financial statements.

The Reserve Banks have voluntarily adopted the internal control reporting
requirements of the Sarbanes-Oxley Act of 200260 and provide an
assessment of the effectiveness of their internal control over financial
reporting annually to their boards of directors.61 Internal control over
financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the entity;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with accounting principles, and that receipts and expenditures of the
entity are being made only in accordance with authorizations of
management and directors; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the entity’s assets that could have a material effect on
the financial statements.

...

Since 2007, Deloitte has been the independent external auditor for the
Federal Reserve System. Accordingly, Deloitte performs the audits of the
individual and combined financial statements of the Reserve Banks and
those of the consolidated LLCs. Deloitte also provides opinions on the
effectiveness of each Reserve Bank’s internal control over financial
reporting. In 2009, Deloitte began providing opinions on the effectiveness
of each LLC’s internal control over financial reporting. 63 To help ensure
auditor independence, the Federal Reserve Board requires that its
external auditor be independent in all matters relating to the audits.
Specifically, Deloitte may not perform services for the Reserve Banks or
others that would place it in a position of auditing its own work, making
management decisions on behalf of the Reserve Banks, or in any other
way impairing its audit independence.

FRBNY management also engaged external firms to review certain
aspects of the emergency programs. For example, FRBNY engaged the
auditing firm KPMG LLP (KPMG) to assist FRBNY in developing a conflict
of interest inspection and fraud-review program for certain programs
created in response to the financial crisis. In 2009 and 2010, KPMG
executed reviews of vendors and agents supporting the Agency MBS
program, Maiden Lane LLC, Maiden Lane II LLC, Maiden Lane III LLC,
TALF, and CPFF. The scope of this work covered an evaluation of the
vendors’ and agents’ adherence to their own conflict of interest policies
and more program-specific provisions contained within their engagement
agreement with FRBNY. These reviews are discussed in greater detail
later in this report. In 2009, FRBNY contracted with a management
consulting firm, Oliver Wyman, to conduct an independent review of the
governance and management infrastructure surrounding its new market
facilities and emergency programs created throughout 2008. This review
was specifically focused on the three Maiden Lane LLCs, CPFF, and
MMIFF and included an examination of internal reporting and
management updates, business and strategic plans for relevant Reserve
Bank functions, internal risk assessments, Reserve Bank policies and
procedures, committee charters, and organizational summaries.

In addition to external audits and reviews, the Federal Reserve System
has a number of internal entities that conduct audits and reviews of the
Reserve Banks, including the emergency programs. For example, each
Reserve Bank has an internal audit function that conducts audits and
other reviews to evaluate the adequacy of the Reserve Bank’s internal
controls, the extent of compliance with established procedures and
regulations, and the effectiveness of the Reserve Bank’s operations. The
internal audit function conducts audits in accordance with the
International Standards for the Professional Practice of Internal Auditing
and maintains organizational independence from management by
reporting directly to the audit committee of the Reserve Bank’s board of
directors.64 During the period from 2008 through 2010, FRBNY’s internal
audit function conducted audits pertaining to the Agency MBS program,
TSLF, Swap Lines, TAF, CPFF, TALF, and PDCF, as well as the three
Maiden Lane LLCs.

...

The OIG also conducts audits, reviews, and investigations related to the
Federal Reserve Board’s programs and operations, including those
programs and operations that have been delegated to the Reserve Banks
by the Federal Reserve Board. The OIG is required to submit a
semiannual report to the Chairman of the Federal Reserve Board and to
Congress. In November 2010, the OIG reported on its review of six of the
emergency programs: TSLF, PDCF, MMIFF, TALF, CPFF, and AMLF.
The OIG stated that the purpose of its review was to determine the
function and status of these programs and to identify risks in each of the
programs to assist the Federal Reserve Board in its general supervision
and oversight of the Reserve Banks.


Page 46:

Audits and Reviews Have Not Identified Significant Accounting or Financial
Reporting Internal Control Issues Concerning the Emergency Programs

The Reserve Banks and LLCs Received “Clean” Opinions on their Financial Statements

Deloitte rendered unqualified (clean) opinions on the individual and
combined Reserve Banks’ financial statements for the years 2007, 2008,
2009, and 2010. As described earlier in this report, the Reserve Banks’
financial statements include the activity pertaining to the emergency
programs, including the accounts and operations of the LLCs, which are
consolidated into FRBNY’s financial statements. Deloitte also has
rendered clean opinions on the financial statements of each LLC
beginning with the creation of Maiden Lane LLC in 2008. A clean opinion
indicates that the financial statements prepared by management are free
of material misstatements and are presented fairly in accordance with
U.S. generally accepted accounting principles (GAAP) or, in the case of
the Reserve Banks, accounting principles established by the Federal
Reserve Board, which is a comprehensive basis of accounting other than
GAAP.

The independent external auditor conducted its financial statement audits
of the Reserve Banks and LLCs in accordance with U.S. generally
accepted auditing standards as established by the Auditing Standards
Board and in accordance with the auditing standards of the Public
Company Accounting Oversight Board.67 These standards require that
the auditor plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement
and whether effective internal control over financial reporting was
maintained in all material respects. The audits of the Reserve Banks’ and
LLCs’ financial statements included examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made
by management, and evaluating the overall financial statement
presentation.

Since the development and implementation of the emergency programs,
the independent external auditor’s internal control opinions related to the
Reserve Banks and LLCs have all been clean, indicating that these
entities have maintained, in all material respects, effective internal control
over financial reporting.

As mentioned in the previous section, in addition to the independent
external auditor, the Reserve Banks’ internal audit function, RBOPS, and
the OIG performed audits and reviews of the emergency programs.
Similar to the external audits, the audits and reviews conducted by these
other groups did not report any significant accounting or financial
reporting internal control issues.[/QUOTE]

Kind of makes wonder how Paul could suggest to you that the Fed is not audited, if he had the slightest bit of honesty.

The Fed is probably the most heavily audited entity in the world. If there is some entity that is more heavily audited, I'm not aware of it.

If you want to focus on something that needs more auditing, check out the DOD and try to figure out where that money goes. A big black hole.

 

Taxpayer-funded feather dusters, which are inserted in the First Booty, while Moochelle, dressed in full femdom glory, rides the girl-throwing , mommy pants-wearing, Princess in Chief around the Oval Office, while tanning his arse with a riding crop, cussin' and yellin' about all the "REAL MEN" she COULD have had?

 

What entity is "fully audited", whatever you mean by that.

It looks pretty fully audited to me.

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What is a FULL audit, and what organizations get a FULL audit?

 

A massive conspiracy involving the GAO, OIG, the Fed including its internal auditing committee, and Deloitte and Touche.

Conspiracy theories abound. I've heard Bush was behind 9-11 and we never landed on the moon and Obama is a Muslim who was born in Kenya too.

 

Here you go:

http://www.federalreserve.gov/econresdata/releases/secholdtrans/current.htm
http://www.federalreserve.gov/newsevents/reform_swaplines.htm

Stop blindly attacking the Fed on things you don't know about for once and starting thinking.

 

Is it the Feds who audit the Feds ?

 

The feds auditors are appointed by the feds, and given their power by the feds, so they are (wink, wink) an unbiased entity.

 

the fed is thoroughly audited by internal auditors, the gao and independent auditors, for example:

The combined financial statements of the Federal Reserve Banks were audited by Deloitte & Touche LLP

http://www.federalreserve.gov/boarddocs/rptcongress/annual09/sec6/c3.htm

with bs like that it's no wonder your guys lose elections so miserably

 

This is the type of disingenuous, dishonest internet blather that we see folks gullibly believe, leading to the kind of ignorance and disinformation we see in threads like this.

First of all, ironically in a web page titled "Before its news" they post this in September 2012 as it if it something new and recent. It is not. The GAO report the article relies upon was released in Jul 2011. I posted a thread on it that month here:

http://www.politicalforum.com/unite...e-audit-fed-operations-emergency-actions.html

Second, the internet page states this: "$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland."

That bit of dishonesty implies that the Fed gave away $16 trillion dollars. That is absolute horse(*)(*)(*)(*). As the GAO article explains, a little over $1 trillion was lent out over a three year period in different revolving loans that were repaid. What the article dishonestly does is take the gross total of the amount lent out over a period of about 3 years and ignores the fact that it was being periodically paid back. As the GAO article states on its introduction on the first page, only a little more than one trillion was every outstanding at and given time. And the internet page false states it was "given" out when it was lent.

Loans outstanding for the emergency programs peaked at more than $1 trillion in late 2008.

Page 1. Sentence 2.

http://www.sanders.senate.gov/imo/media/doc/GAO Fed Investigation.pdf

The dishonest people who write crap like that assume that most people are gullible and misinformed and will just blindly believe their lies instead of actually going to the source to verify it for themselves. And based on the number of people who have made references to it, they are correct.

As a final point, the internet page list (again in gross amounts adding up revolving debt that was periodically paid) the banks that received the loans.

What they don't tell you is that 99% of all those loans were repaid.

Because even a cursory reading of the article shows they are not interested in providing the truth.

What is sad is how many will read crap like this and just blindly believe it without a bit of critical thought.

Here's a couple more threads on the subject we had when it was really news, not regurgitated horse(*)(*)(*)(*).

http://www.politicalforum.com/current-events/198356-audit-fed-gave-16-trillion-emergency-loans.html page 1, 14-15

http://www.politicalforum.com/current-events/217176-fed-audit-results-finally-23.html pages 23, 25-26, 29

 

Please provide evidence that the Fed appointed the GAO and OIG to audit it.

Not that I'd think you'd just make up something like this. (wink wink)

As to Deloitte and Touche, which is a Big 4 public accounting firm, the Fed does appoint them and changes the auditor every few years (it was Price Waterhouse until about 3-4 years ago, which is the same as every other entity in the US I know of.

 

No. If you actually read the links and excerpts I provided instead of relying on silly internet blogs, you'd realize that the Fed is audited by Deloitte and Touche, a Big 4 public accounting firm, as well as the GAO, OIG, and its own internal audit committees.

 

It's called a question. It seems that Ron Paul was the one who Asked for and got GAO . I'm still confirming who selects the GAO and who decides what information to give and what information to withhold .

<<< MODERATOR EDIT: INSULT >>>

 

The answer was in the links I had already posted.

 

That&#8217;s like a wolf guarding the hen house.

 

you're absolutely wrong

the gao has been auditing the fed all along

it has nothing to do with ron paul's ludicrous propaganda

did you miss this?

 

A little more from the GAO report on that supposed $16 million the internet blog didn't tell you.

This is the text from the chart where they $16 trillion figure came from. That figure which is from a chart on page 131, table 8 of the GAO Report, does not show total loans outstanding, but "Institutions with Largest Total Transaction Amounts"

That means that that is the gross amount that was extended in loans, not the total amount lent. A lot of the loans were short term revolving loans. So the Fed might loan one entity $10 billion for 10 days. After 10 days it is paid back. Then the Fed loans it another $10 billion. Then that is paid back. Then it loans it another $10 billion. Then that it paid back.

In that case, the total amounted loaned is $30 billion, but the most ever outstanding is $10 billion and it was paid back.

That is what that $16 trillion shows is the total gross amount of loans of transacted, not the amount of money lent out and any given time. That figures was far less, more like a trillion.

This is explained in the notes above the table:

Tables 8 and 9 rank the largest borrowing institutions according to aggregate borrowing (irrespective of differences in term to maturity) and total borrowing after adjusting for differences in loan terms. For both tables, we show transaction amounts for AMLF and TALF, but do not factor these amounts into the rankings as entities participating in these programs served as intermediary borrowers whose purchases provided liquidity support to other market participants. ...

Table 8 aggregates total dollar transaction amounts[/B] by adding the total dollar amount of all loans but does not adjust these amounts to reflect differences across programs in
the term over which loans were outstanding. For example, an overnight PDCF loan of $10 billion that was renewed daily at the same level for 30 business days would result in an aggregate amount borrowed of $300 billion although the institution, in effect, borrowed only $10 billion over 30 days. In contrast, a TAF loan of $10 billion extended over a 1-month
period would appear as $10 billion.

This is a good example of how the propaganda media distorts and misinforms and disinforms and lies, and how so many just gullibly believe the garbage they put out.

 

So the Auditors are now independent? You said "internal"

 

Rep. Ron Paul (R-Tex.) wins (again) the most significant victory of his congressional career. He has taken his pet issue since the 1970s--the unwarranted power and secrecy of the Federal Reserve--from something pretty much no one but him cared about six years ago, through a bestselling book and mass movement by 2009, the second time he's gotten the House of Representatives to vote to widen the government's powers to audit the Fed's activities.

Huffington Post with details about the vote , and on Paul's Democratic ally equally upset with the Fed's lack of transparency, Rep. Dennis Kucinich (D-Ohio):

In a rare moment of bipartisanship, the House overwhelmingly passed a bill by Rep. Ron Paul (R-Texas) to audit the Federal Reserve.

The first ever GAO (Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out.

Now, who doesnt know what they are talking about ??? LOL!

 

Who do you contend should do the audits? Rand Paul? LOL

 

Like most major public companies do, the Fed has an internal audit committee that independently audits and reviews the records and operations and reports to the Fed Board. It is also audited by and independent big 4 public accounting firm (Deloitte and Touche) as well as US Govt agencies that are independent of the Fed, like the GAO and OIG.

 

An independent firm that has no ties to the government.

 

<<< MODERATOR EDIT: OFF TOPIC >>>

Ron Paul was involved in getting that specific audit, but the GAO has audited the Fed for years.

Here for example is an audit report from 2009, well before the financial crisis audit referred to in the OP.

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Like Deloitte and Touche? Like Price Waterhouse?

 

i said the fed is audited by internal auditors, the gao and independent auditors

and i linked to an audit done by an independent auditor

you obviously don't know much about it

that's sheer ignorance

no wonder ron paul lost so miserably

 

So where are the GAO results from 1960 ? 1970 ? 1980 ? 1990 ? 2000 ?
They've always done it right ? Should be simple to find ???

 

at the fed, have at it

http://www.federalreserve.gov/publications/annual-report/default.htm