The cause of this was the timing of when SAP went down.  SAP had a major 
system crash the day Willie finaled his supply verification in Unify.  Before 
Willie went into SAP to net the payable (same day), SAP crashed.  By the time 
SAP came up, the treasury run had already picked up the payable and wired the 
cash.  When we issued the recall, the money was already out the door.

As a result, we put a policy in place that all supply verifications for 
netout customers must be overridden as soon as they are finaled in Unify.  
This causes them to be blocked in SAP and not picked up by treasury until the 
payment block is removed.  This policy went into effect at the beginning of 
September.  

However, this still relies on human intervention to ensure the procedure 
works.  To ensure we don't "accidentally" release cash, I have asked Unify IT 
to change the interface to send all purchases for ENA to SAP blocked, which 
will require the coordinator to release funds.  This is an added step, but is 
worth it considering the stakes.  This change will go into effect on Monday, 
9/25.  If you have any questions, please let me know.

Bryce


   
	Enron North America Corp.
	
	From:  Sally Beck                           09/22/2000 04:33 PM
	

To: Bryce Baxter/HOU/ECT@ECT, Leslie Reeves/HOU/ECT@ECT
cc:  
Subject: Re: Perry Gas -SAP Override issue

I have read this series of e:mails but I am not sure that I fully understand 
the issue.  Did Willie not do his job?  Are there problems with how SAP 
works?  Are both of these an issue?  Please let me know if we have a far 
reaching problem with SAP and netting.  Thanks.  --Sally 
---------------------- Forwarded by Sally Beck/HOU/ECT on 09/22/2000 04:29 PM 
---------------------------
   
	
	
	From:  William S Bradford                           09/22/2000 04:04 PM
	

To: Sally Beck/HOU/ECT@ECT
cc: Debbie R Brackett/HOU/ECT@ECT 
Subject: Re: Perry Gas -SAP Override issue

Sally,

Are you aware of the problems with SAP?  This error caused an incremental 
$600,000 credit loss to Perry Gas Companies that could have been prevented.

Let me know if you have any questions.

Bill

---------------------- Forwarded by William S Bradford/HOU/ECT on 09/22/2000 
04:02 PM ---------------------------
   


From:  Russell Diamond                                                        
     09/22/2000 03:01 PM	
	
	
	                           
	

To: William S Bradford/HOU/ECT@ECT, Debbie R Brackett/HOU/ECT@ECT
cc:  
Subject: Re: Perry Gas -SAP Override issue

FYI-

---------------------- Forwarded by Russell Diamond/HOU/ECT on 09/22/2000 
03:01 PM ---------------------------
   
	
	
	From:  Bryce Baxter                           09/22/2000 02:47 PM
	

To: Russell Diamond/HOU/ECT@ECT
cc:  
Subject: Re: Perry Gas -SAP Override issue  

Russell - as I remember, Willie finaled the Supply Verification and it was 
interfaced to SAP.  This is fine, and then Willie was going to net the A/P 
and A/R.  SAP went down after the statement was interfaced, but before Willie 
was able to block or net the payment.  When SAP came back up the next day, 
the payment had already gone out and we were unable to recall the wire.  If 
you have any further questions about this, call me.  Thanks.


   


From:  Russell Diamond                                                        
     09/22/2000 01:46 PM	
	
	
	                           
	

To: Willie Stewart/HOU/ECT@ECT
cc: Audrey Cook/HOU/ECT@ECT, Bryce Baxter/HOU/ECT@ECT 
Subject: Perry Gas -SAP Override issue

Willie,

Per our earlier conversation, can you or Audrey or Bryce, please give further 
explain to me as to why the funds were wired to Perry Gas for purchases from 
the counterparty instead on netting the amounts between purchases and sales.  
You mentioned to me the process of overriding the counterparty's that net on 
SAP, although because of timing, the override did not take place.

Thank you,

Russell