Federal Agency

Updated on April 25, 2024
Article byJyotsna Suthar
Reviewed byDheeraj Vaidya, CFA, FRM

What Is A Federal Agency?

A Federal Agency is a corporation, or an agency formally initiated by the United States government for management and security purposes. The prime purpose of these agencies is to work for a cause and manage each federal government department, including financial entities.

Federal Agency

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For every established federal agency in the USA, there is a specific purpose to perform. These agencies have an age-old history dating back to the 1900s. They keep a close watch over the significant activities and administration of the state. However, Congress also has a fundamental role to play in these agencies.

Key Takeaways

  • Federal agencies refer to the organizations, agencies, or corporations initiated by the United States government that work for the state and its well-being.
  • The first federal agencies operated from 1789 until the mid-19th century. The heads of these agencies were allowed to manage and follow disciplined procedures.
  • The federal government creates them and, hence, is different from state
    agencies, which are created within the state to fulfill the requirements of the public.
  • Examples include the Internal Revenue Service, the Department of Justice,
    Department of Treasury, and the Consumer Product Safety Commission.

Federal Agency Explained

A federal agency refers to an organization created by the US government that works for a specific cause. It works as a helping hand for the US legislature. Here, the cause can be work-specific or event-specific. Therefore, the federal agencies list contains many corporations. They are created by legislative action. However, the election of the federal agency’s directors is also through presidential orders.

In technical terms, federal refers to the United States government. Likewise, the agencies they open are known as federal agencies. These agencies provide various facilities and protections that cater to a large population. Plus, they also look into the issuance of bonds to investors.

The primary purpose of issuances is to raise capital for the organization. Although they do not work on par with government bonds, they benefit investors. Another feature of these bonds is that they provide higher interest than treasury bonds. However, technically speaking, they are less liquid. The working and cultural environment in these agencies has attracted many individuals. Moreover, federal agency salaries are also equivalent to the high-paying jobs available in the country. According to reports, the Securities and Exchange Commission ($203,985.48) is among the highest-paying federal agency salaries in the US.


Let us look at the historical events of the most extensive federal agency list to comprehend the concept better:

#1: 1789 to 1830

The first federal agencies were established in the United States. They include the Department of War (until 1947), Office of the Attorney General, Navy, State, and Treasury.

#2: 1849 to 1872

In the upcoming decade, new agencies like the Department of the Interior, the Department of Justice, and the Post Office Department rose. Later, in 1862, the Internal Revenue Service was also formed. Each of them contributed to the activities of the federal government’s growth. Likewise, in 1868, the Treasury Department started releasing its decisions on customs.

#3: Until 1900

Congress created the first regulatory commission, the Interstate Commerce Commission, in 1887. They looked after the extra charges imposed on farmers and merchants for conducting interstate trade.

#4: 1900 to 1950s

During the Great Depression of 1929, then-US President Franklin D. Roosevelt announced a new addition to the largest federal agency regarding health and safety. They aimed to speed up recovery and contribute to the economic growth rate.

#5: 1960 to 2000

At this time, new agencies were developed for consumer health and safety. Some of them were the creation of the Occupational Safety and Health Administration in 1971, the Environmental Protection Agency in 1970, and the Consumer Product Safety Commission in 1973.

Besides, there were more instances during this period. In 1971, presidents took charge of regulating and developing these agencies. Likewise, in 1985, former President Ronald Reagan suggested the agencies adopt a regulatory plan to work in parallel with the White House.

#6: After 2000

In 2007, then-President George W. Bush made amendments that could effectively solve regulatory issues and manage federal agencies. Since then, there have been quite a few changes in its workings.


Let us look at the roles of the federal agency to comprehend the concept better:

  1. Create and implement the guidelines and regulations on time.
  2. Offer a wide range of services to the public and work for their welfare.
  3. Conduct research and analyze the data for more informed future decisions.
  4. Manage resources like land, water, electricity, natural resources, etc. sustainably.
  5. Monitor threats and protect national security by conducting timely investigations.
  6. Collaborate with the state and other agencies to solve public issues.
  7. Maintain records of previous as well as current procedures. 


Let us look at the examples of federal agencies to understand them better:

Example #1

Suppose the United States suffers from a war situation. In this situation, the government works with the Treasury Department to recover from the situation. They promote economic stability and the growth of the nation. Likewise, they integrate with other federal agencies. It allows them to follow the guidelines and other regulations. As a result, the country regains its original status in the later stages.

Example #2

In the article dated May 2023, the US government asked the Department of Treasury about the payments on the debt ceiling defaults. It would provide some clarification on the payments that they are expected to make and receive. Hence, they get a warning call if the government runs short of cash.

The article also stated that the Treasury must have accurate information about the magnitude and timeline of payments to have an accurate forecast. Hence, there is proper planning of cash flow in the country, which keeps US financial entities operating smoothly and in an organized manner.

Federal Agency vs State Agency

Although federal and state agencies work for the nation’s betterment, they differ widely. Let us look at them:

BasisFederal AgencyState Agency
MeaningIt refers to the agencies initiated by the federal (also US) government.State agencies refer to government organizations operating at the state level.
PurposeTo eradicate the cause and manage the specific department using a well-defined structure and procedure.To work at the state level and fulfill the requirements of the public.
OriginThe origin of these agencies started in the 18th and 19th centuries.Late 18th and 19th century
ExamplesDepartment of Treasury, Internal Revenue Service, Department of Justice, and other agencies.California Department of Transportation, Alabama Department of Transportation, and others.

Frequently Asked Questions (FAQs)

1. Is Osha a federal agency?

Yes, OSHA is a part of the federal agency that works for the rights and equality of the labor force. It follows the Occupational and Safety Health Act for standard guidelines. In addition, it is also inclusive of the US Department of Labor.

2. Which federal agency is in charge of FERPA enforcement?

The US Department of Education is solely responsible for enforcing FERPA (Family Educational Rights and Privacy Act). It looks after the families’ educational rights and the individuals’ literacy rates.

3. What federal agency is responsible for investigating counterfeiting?

The US Secret Service, founded in 1865, looks after the investigation of counterfeiting cases. This agency compacted the counterfeit currency issue after the Civil War.

4. What federal agency regulates the bottled water industry?

The Food and Drug Administration (FDA) offers a summary of every aspect of the food-related industries’ operations. Thus, their regulations also apply to the bottled water industry.

This article has been a guide to what is a Federal Agency. Here, we compare it with state agency, and explain its history, roles, and examples. You may also find some useful articles here –

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