The primary responsibility for
ensuring that the above standards are applied is entrusted to the
management of each Reserve Bank. Accordingly, Reserve Bank management
will ensure that these standards are clearly represented in Reserve
Bank policies, procedures, and controls. Consistent with its overall
responsibilities, oversight of business conduct is provided by each
Reserve Bank’s board of directors, principally through the Bank’s
internal-audit function. The internal-audit function of each Reserve
Bank maintains independence from operating management by reporting
directly to the Reserve Bank’s board of directors.
Oversight of Reserve Bank priced-service activities
is also carried out by the Board of Governors. This is accomplished
through review and approval at the Board level of price and service-level
changes. Furthermore, Reserve Bank priced-service activities are evaluated
in conjunction with on-site reviews by the Board’s operations review
and financial examination staffs. Board oversight through these means
ensures that Reserve Bank activities are consistent with the MCA and
with Board policies with regard to priced services. In addition, the
Board member serving as the chairman of the Board’s Federal Reserve
Bank Activities Committee is responsible for investigating and responding
to complaints concerning actions of Reserve Bank personnel that are
alleged to be inconsistent with the standards presented above, and
inquiries concerning Reserve Bank actions may be directed to that
person’s attention.
The internal-audit and Board examination activities focus
on Reserve Bank compliance with policies, procedures, and controls,
including standards of conduct related to priced-service activities.
Audit and examination attention also encompasses activities and functions
such as organizational structure and staffing, financial accounting
and reporting, allocation of costs, information flows, and associated
internal controls.
