The measure was approved by the House Financial Services Committee as it considered broad bank regulatory reform legislation, and included a package of other measures weakening the Fed's power and capping how much it can lend or guarantee.
The committee is now poised to pass the entire bill and has scheduled its final vote on the legislation for December 1.
Lawmakers also agreed to provisions that would require the Fed to work with other regulators before acting as a lender-of-last-resort.
"If you care about transparency of the Fed, you would allow a look at monetary policy," Paul said. "We're dealing with trillions of dollars that doesn't get audited. There is no reason why the world can't know, eventually, what the Fed is doing."
Paul's measure, which was approved by a vote of 43 to 26, would require the Government Accountability Office to audit the central bank's interest rate policy, agreements with foreign governments, foreign central banks and the International Monetary Fund. It also would permit audits of a roughly $800 billion Fed mortgage-backed securities purchase program, which could grow to $1.25 trillion, Paul said.
The GAO would be instructed to complete a Fed audit within 12 months of passage of the bill.
For background, see my November Reason magazine feature on how this unlikely bill took anti-Fed thought from the fringes to the mainstream