-----Original Message-----
From: 	Hernandez, Nancy  
Sent:	Thursday, August 30, 2001 6:00 PM
To:	Jones, Tana
Subject:	Please review request by auditors 

My Comments are in blue below.  Please advise if its ok to release a copy of the report.  Also feel free to make any comments as needed.


Nancy

 -----Original Message-----
From: 	carrie.a.richardson@us.andersen.com@ENRON [mailto:IMCEANOTES-carrie+2Ea+2Erichardson+40us+2Eandersen+2Ecom+40ENRON@ENRON.com]  On Behalf Of carrie.a.richardson@us.andersen.com
Sent:	Thursday, August 30, 2001 3:55 PM
To:	Hernandez, Nancy
Cc:	jennifer.l.muse@us.andersen.com; s.jack.ehrig@us.andersen.com
Subject:	Additional Questions

Nancy,

In finishing our review of the Risk Controls Group, we have developed a few
additional questions listed below:

   What are the procedures related to NYMEX violation limits? [Hernandez, Nancy]   A COB report is run on every trading day.  The report has hard coded limits set based on Nymex limits report provided by Tana Jones (legal).   
     1.  What system is utilized in this monitoring process, and how often
are NYMEX violations monitored?   [Hernandez, Nancy]  Daily  Has there ever been any problems with this
system?   [Hernandez, Nancy]  No.  Data is captured based on Tagg deal entry attributes Could we obtain current copies of the reports that are used to
monitor NYMEX violations? [Hernandez, Nancy]   I would have to clear the issuance of the reports, but I don't think it would be an issue.   
     2.  What procedures are performed when Enron is approaching a limit? [Hernandez, Nancy]   Notification of Business Unit Risk Manager or Director.  [Hernandez, Nancy]  Report is issued daily to specific groups.   
Do traders notify you prior to exceeding a limit and do they perform
monitoring procedures too?    [Hernandez, Nancy]  I am not sure if they do their own procedures.   Who do you contact, and what is the timeline in
regards to sending a letter to the NYMEX?   [Hernandez, Nancy]  No known correspondence with NyMex Could we get a copy of any
recent correspondence with the NYMEX when Enron was approaching a limit? [Hernandez, Nancy]   No know correspondence. 
     3.  Are the procedures the same when you see a violation has occurred?  Legal to answer
What penalties are assessed for noncompliance?   [Hernandez, Nancy]  Legal to answer Have penalties ever been
incurred? [Hernandez, Nancy]   legal to Answer 

   It is my understanding after talking to Jennifer Nguyen that you
   performed a reconciliation of all of the source systems to RisktRAC.
   Additionally, she indicated that since January, any new curve added is
   notified, documented, and monitored by the Risk Controls Group.  What is
   this process?  Are there any forms utilized?  Would it be possible to
   get copies of the reconciliations performed and forms utilized, if any,
   in the addition of new curves?

   For inclusion in the AO1 Report, is it accurate that Credit inputs the
   data into Risky Business and the Risk Controls Group provides the report
   to upper management.  If not, does Risk Controls Group input these deals
   not captured in the system?  What is this process?

If you have any questions, please feel free to call me at x56959.  Please
provide us responses at you earliest convenience and additionally the Risky
Business Reports Jack Ehrig previously requested.

Thank you,
Carrie

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