Federal Reserve Chairman Kevin Warsh has turned oversight of the central bank’s troubled headquarters renovation over to the General Services Administration and ordered an independent audit after a watchdog found extensive failures in cost control, contract management and senior oversight.

Warsh announced the changes Wednesday following the release of a 120-page report from the Federal Reserve’s Office of Inspector General on the renovation of the Eccles and 1951 buildings in Washington. The project’s costs have more than doubled from an original estimate of $921 million. Construction costs reached roughly $2 billion by late 2024, and the overall project is now estimated at $2.4 billion to $2.5 billion.

The inspector general found repeated departures from established cost-control procedures and major spending decisions that moved forward without the senior review the project’s own rules required. Approximately $2 billion of the $2.1 billion in construction work awarded through December 2025, about 95%, fell outside those rules even as costs climbed more than $1 billion above the initial budget.

Internal oversight structures did not clearly assign responsibility for monitoring budget and schedule. Senior officials relied heavily on the project team and often lacked detailed knowledge of major decisions. Thirty-six of 40 budget or schedule assessments described the project as on track, yet the benchmarks themselves were revised 13 times. Rather than set a firm cost ceiling, the Federal Reserve repeatedly increased the budget as expenses rose. A key safeguard, the Guaranteed Maximum Price agreement, remained unfinished after years of construction; Warsh directed that negotiations be completed promptly.

Inflation alone did not explain the jumps. Two major mechanical, electrical and plumbing packages estimated at a combined $178 million in March 2022 were awarded for $539 million in 2023, while broader construction inflation in that period was about 16%. Other contracts were hundreds of millions above earlier estimates, and some packages were approved without at least three bids.

Warsh said the GSA will now serve as Project Executive, reporting directly to the Board of Governors and to him. He also ordered an independent auditor to examine the accuracy and compliance of awarded costs. The Fed and GSA will review contracts and seek reimbursement or credits for any work paid for but not performed.

The report found no evidence of criminal wrongdoing. The problems occurred during Powell’s tenure and resembled deficiencies previously identified in the Fed’s Martin Building renovation. The project had already drawn political scrutiny, including questions from Senate Banking Committee Chairman Tim Scott and repeated criticism from President Donald Trump, who later called for Powell’s immediate resignation after the report’s release.

Warsh committed the Federal Reserve to implementing all seven inspector general recommendations and establishing stronger permanent budgeting and oversight controls. The watchdog concluded that controversial design features such as marble and water elements did not materially drive the overruns; management failures, design changes and weak cost controls played the larger role. Completion is now projected for December 2027, well beyond the original mid-2024 target.