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Any bank using the phrase, “National Bank” in its name must be a member of the Federal Reserve System. They must maintain minimum levels of reserves with one of the 12 Federal Reserve banks and must deposit a percentage of their customers’ savings account and checking account deposits in a Federal Reserve bank. All banks incorporated under a national charter are required to become members of the Federal Reserve System. Banks incorporated under a state charter may apply for membership......the federal reserve is composed of incorporated banks, making the fed incorporated....the member banks own stock in it....the only way to own stock in the fed is to own stock in a member bank......

“The Federal Reserve is an agency of US Government created by Congress in 1913. The member banks under Federal Reserve are actually private corporations and all the stocks of Federal Reserve are owned by member banks. Federal reserve notes are in theory backed by the assets of the Federal Reserve, but primarily by the power of Congress to lay taxes on people. See excerpts of interview with Mr. Ron Supinski of the Public Information Department of the San Francisco, Federal Reserve Bank on October 8, 1992. [1]”

from: http://www.sourcewatch.org/index.php?title=Federal_Reserve_Corporation

footnote link: http://www.maxexchange.com/ybj/chapter_1.htm

From: Lewis v. United States, 680 F.2d 1239 (1982):

“Federal reserve banks are not federal instrumentalities for purposes of a Federal Tort Claims Act, but are independent, privately owned and locally controlled corporations in light of fact that direct supervision and control of each bank is exercised by board of directors, federal reserve banks, though heavily regulated, are locally controlled by their member banks, banks are listed neither as “wholly owned” government corporations nor as “mixed ownership” corporations; federal reserve banks receive no appropriated funds from Congress and the banks are empowered to sue and be sued in their own names. . . .”

Futher: the Appeals Court “held that federal reserve banks are not federal instrumentalities for purposes of the Act, but are independent, privately owned and locally controlled corporations.”

This article notes that the Federal Reserve operates outside of the Constitution from the standpoint that just like GM or Microsoft, it is not organized under any of the three branches of government enumerated in the Constitution.

I can find no record that Federal Reserve has ever had an independent audit. That would be an excellent place to start. I would raise the issue of how Sarbanes-Oxley touches on how publicly listed shareholders of the Federal Reserve like Citibank can “mark to market” the value of their shares in the Federal Reserve corporation.