Federal Reserve System Audited Annual Financial Statements

The Board of Governors, the Federal Reserve Banks, and the LLCs are all subject to several levels of audit and review. The Reserve Banks' and LLCs’ financial statements are audited annually by an independent public accounting firm retained by the Board of Governors. To ensure auditor independence, the Board requires that the external auditor be independent in all matters relating to the audit. Specifically, the external auditor may not perform services for the Reserve Banks, the LLCs, or affiliates that would place it in a position of auditing its own work, making management decisions on behalf of the Reserve Banks or the LLCs, or in any other way impairing its audit independence. In addition, the Reserve Banks and LLCs are subject to oversight by the Board.

The Board of Governors' financial statements are audited annually by an independent public accounting firm retained by the Board's Office of Inspector General. The Office of Inspector General also conducts audits, reviews, and investigations relating to the Board's programs and operations as well as of Board functions delegated to the Reserve Banks and the LLCs.

Audited Annual Financial Statements of the Federal Reserve System
(annual statements as of and for the years ended December 31, 2021 and 2020)
Combined Federal Reserve Banks 2021 PDF*
Federal Reserve Bank of Atlanta 2021 PDF
Federal Reserve Bank of Boston 2021 PDF
LLC Consolidated by the Federal Reserve Bank of Boston
MS Facilities LLC

2021 PDF
Federal Reserve Bank of Chicago 2021 PDF
Federal Reserve Bank of Cleveland 2021 PDF
Federal Reserve Bank of Dallas 2021 PDF
Federal Reserve Bank of Kansas City 2021 PDF
Federal Reserve Bank of Minneapolis 2021 PDF
Federal Reserve Bank of New York 2021 PDF
LLCs Consolidated by the Federal Reserve Bank of New York
CP Funding Facility II LLC
Corporate Credit Facilities LLC
Municipal Liquidity Facility LLC
Term Asset-Backed Securities Loan Facility II LLC

2021 PDF**
2021 PDF**
2021 PDF
2021 PDF
Federal Reserve Bank of Philadelphia 2021 PDF
Federal Reserve Bank of Richmond 2021 PDF
Federal Reserve Bank of San Francisco 2021 PDF
Federal Reserve Bank of St. Louis 2021 PDF
Board of Governors 2021

* Minor editing issues were identified, and a corrected document was reposted on March 24, 2022. The first table in Note 4 had PPPLF and MMLF loans outstanding mislabeled. In Note 6, memorandum information related to 2021 distribution of cumulative LLCs earnings was inadvertently omitted.
** Indicates entities with annual statements that have different year-end periods.

View archive of annual audited financial statements

The financial statements of the Board of Governors and the LLCs are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"); those of the Federal Reserve Banks are prepared in accordance with the Financial Accounting Manual for Federal Reserve Banks ("Financial Accounting Manual"). Accounting principles for entities with the unique powers and responsibilities of the nation's central bank have not been formulated by accounting standard-setting bodies. The Board of Governors has developed specialized accounting principles and practices that it considers to be appropriate for the nature and function of a central bank. These accounting principles and practices are documented in the Financial Accounting Manual.

The primary difference between the accounting principles and practices in the Financial Accounting Manual and GAAP is the presentation of all System Open Market Account (SOMA) securities holdings at amortized cost rather than the fair value presentation required by GAAP. Amortized cost, rather than the fair value presentation, more appropriately reflects the financial position associated with the Reserve Banks’ securities holdings given the System’s unique responsibility to conduct monetary policy. Although the application of fair value measurements to the securities holdings may result in values substantially greater or less than their carrying values, these unrealized changes in value have no direct effect on the quantity of reserves available to the banking system or on the ability of the Reserve Banks, as the central bank, to meet their financial obligations and responsibilities. Both the domestic and foreign components of the SOMA portfolio may involve transactions that result in gains or losses when holdings are sold before maturity. Decisions regarding securities and foreign currency transactions, including their purchase and sale, are primarily motivated by monetary policy and financial stability objectives rather than profit. Accordingly, fair values, earnings, and gains or losses resulting from the sale of such securities and currencies are incidental to the open market operations and do not motivate decisions related to policy or open market activities. Accounting for these securities on a settlement-date basis, rather than the trade-date basis required by GAAP, better reflects the timing of the transaction’s effect on the quantity of reserves in the banking system.

In addition, the Reserve Banks do not present a Statement of Cash Flows because the liquidity and cash positions of the Reserve Banks are not a primary concern given the Reserve Banks' unique powers and responsibilities. Other information regarding the Reserve Banks' activities is provided in, or may be derived from, the Combined Statements of Condition, Operations, and Changes in Capital.

Financial Accounting Manual for Federal Reserve Banks

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Last Update: March 24, 2022