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Board of Governors of the Federal Reserve System
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Annual Performance Report 2014

Strategic Theme 6: Cost Reduction and Budgetary Growth

Establish a cost-reduction approach and a budgetary-growth target that maintains an effective and efficient use of financial resources.


Objective 6.1: Use financial resources efficiently and effectively.

In this Section:

Greater scrutiny of how financial resources are used will contribute to achieving budgetary-growth targets. Process changes that make the budget process more efficient will help ensure strategic investments remain within a sustainable budgetary range and provide the appropriate level of support for the Board to continue meeting its legislated mandates. The Board also needs the flexibility to provide an appropriate level of financial support to deliver new regulatory obligations and build capabilities to improve the way it delivers its mission for monetary policy, financial stability, and supervision.

Accomplishments
  • Review current processes for allocating certain costs to division cost centers and explore allocation of other costs to central accounts. Identify changes for the 2015 budget process.
    • Reviewed key administrative processes to identify opportunities for reducing redundancy and enhance operational efficiency. Work will continue in 2015 to further assess system limitations and potential enhancements to provide for allocation of costs.
  • Enhance capital expense management through additional automated controls.
    • Centralized and streamlined tracking and reporting for Boardwide capital and strategic projects, including initiating collaborative meetings among divisions to build consensus and achieve common goals.
    • Used new automation tools to develop the 2015 capital budget and cost-estimation expenses for new initiatives.

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Objective 6.2: Achieve budgetary savings and expense growth in line with Board-approved targets.

In this Section:

Budgetary discipline is necessary to manage the unavoidable expense growth required by the strategic framework. Enhanced cost-management strategies that help offset the strategic initiatives will contribute toward maintaining expense growth in line with approved targets.

Accomplishments
  • Continue implementation of cost-savings initiatives identified during development of the strategic framework.
    • Implemented additional controls over promotions and reclassifications budgets for all divisions through central management within the HR function.
    • Awarded a new five-year contract for off-site mail services, which resulted in $1 million in savings over the previous annual contracted price.
    • Implemented cost savings identified by Print Shop staff in 2013 through the cancellation of leases for several pieces of equipment.
    • Outsourced travel expense reimbursement processing, saving over $200,000 per year.
  • Re-baseline division budgets and provide recommendations to the CBA for midyear adjustments in line with approved initiatives.
    • Analyzed spending on 2014 approved initiatives at midyear and provided the CBA with annual
      projected spending, inclusive of the approved initiatives.
    • Identified major variances for goods and services and re-baselined 2015 operating budgets to reflect prior years' spending trends.

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Last update: June 3, 2015

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