The Federal Reserve’s internal watchdog has concluded that the central bank needs to strengthen how it protects its workforce and sensitive information when employees travel overseas, according to a newly released Inspector General report.
The audit found that the Fed currently does not maintain a formal program to prepare staff for international travel or to perform post-travel checks intended to flag suspicious events. The IG said the central bank also lacks a central system to track employee foreign travel or to circulate consolidated risk assessments tied to overseas trips. In addition, the report noted there are no tools in place to verify whether staff comply with foreign travel rules.
Under present policy, international travel reporting requirements extend only to employees who hold security clearances, the IG said. The report emphasized this is an incomplete safeguard because many other Fed staff members may handle confidential central bank information without having formal clearances.
While the IG acknowledged the purpose of international engagement - helping the Board work with other central banks and various foreign governmental and nongovernmental organizations - the report underscored that such travel creates both information security vulnerabilities and physical safety risks for Fed personnel.
"It is common for foreign adversaries to target U.S. government employees to acquire nonpublic information," the IG said in the report.
The report specifically calls out China, saying the country "has targeted and obtained information from the System, as evidenced by an insider risk incident." It outlines typical foreign collection methods identified in the review, including focusing on government staff during overseas visits and conferences and using academic solicitation to obtain sensitive or national security information.
A spokesperson for the Inspector General described the review as self-initiated and part of a broader assessment of how the Fed manages information and operational risks. The IG report states the Federal Reserve is responding to the identified concerns and recommended reforms and is working to improve its approach to staff international travel.
The findings indicate several administrative and security gaps the Fed must address if it is to better protect employees and nonpublic information when engagements cross borders. The report does not specify a timeline for reforms, and it notes that broader work on risk management is underway.
Summary of findings
- No formal pre-travel preparation program or post-travel checks are in place.
- No centralized tracking or shared risk assessments for employee foreign travel.
- Reporting requirements apply only to cleared staff despite wider access to confidential information.