For your information.

Laura

 -----Original Message-----
From: 	Penman, Gregg  
Sent:	Friday, September 14, 2001 9:56 AM
To:	Tomaski, Richard; Simpson, James; Fascetti, Lee; Rodrigue, Robin; Pikofsky, Lynn; Kimbrough, Jona
Cc:	Luce, Laura
Subject:	enovate audit

As most of you are aware, People's internal audit team, with assistance from an audit consultant specializing in trading operations, has been conducting an audit of enovate business processes, reporting, and general operations.  The audit has been concluded with the issuance of a formal report to People's senior management as well as a PERC/enovate response to their review.  Overall, People's audit team found enovate to be a very well managed operation with proper controls, appropriate separation of duties and adequate reporting. As noted in their report, "...the enovate team has done an outstanding job of creating a well-organized and profitable business.  We found that enovate's and Enron's staffs were extremely helpful, knowledgeable and willing to assist us during the course of the audit."  Furthermore, "The audit found that the general management of enovate's business processes was very good, and exceeded that of many entities that had been in business for several years.  Our review of enovate found the trading activity to be well monitored with adequate segregation of duties between the trading, management and support functions."  

Everyone deserves credit and should take pride in the overall findings of the audit, particularly given the complexity of enovate and our sometimes limited resources.  Also, thank you for your patience and accommodations of the audit team throughout the process.  

However, like all audits there are certain items which need to be addressed, clarified or improved.  We have set a timeline to address each one of the findings and provide an appropriate response to the audit team.  As such, a few of you will be requested to provide additional assistance in the near future.  I will be contacting those individuals separately to discuss the necessary follow up.

Thanks - Gregg