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Enron Mail |
Thanks for your comments on the standards. Our approach in creating a global
exception reporting mechanism is to start simply and build from there. Our initial cut is to have effective exception reporting on a handful of critical standards by the end of this year. That will be a first, to on a daily basis have a view into the exceptions outside the global standards. Many of the measurements that you mention are great management tools for accessing the level of excellence of the services that we are delivering and the competence of those that are managing these services. Some of these may be more appropriately contained in a monthly operations report that I have instituted within ENA and which we are working to proliferate across all of the wholesale merchant services companies. Give me a call and we can set a time to get together for a few minutes and I can review this operating report with you. We spent some time at our offsite in late October with all operations controllers reviewing and discussing these standards. Shona has taken a stab at the format of these exception reports. It is likely that we will have a rep from each of the operating companies participate in the final design of these reports, so that all feel as if they own the intended output from these reports. Yes, we are gleaning this information from those that are responsible for these activities. My purpose is not to use this info to punish or prosecute, but instead to use this exception report as a tool to garner resources as needed to clear the exceptions. It is invariably the deals that are exceptions in some way that create the problems. For instance, small power deals that were done in Calgary before they had a power book set up. These were "on the side" and not captured in total power exposure because they didn't have a book to put them in (a discovery during the doorstep review). If this goes on the exception report, then we can highjack someone in risk in Houston to help Calgary set up a new book, or get IT resources focused quickly on any solution that may require their input to fix. By having a prescribed elevation of these exceptions, we should get the appropriate attention to correct them. The spur for making sure that all exceptions are appropriately noted, will be that if there is a problem with any deal that was an exception (not in the books, no confirm, etc.) and was not included on the exception report, that this will be grounds for termination for the appropriate operations controller. I will make sure that as we start this reporting process that this is well understood. The other impetus will be that during doorstep reviews the operational activities will be gauged against these standards. The AA internal audits should also access adherence to these. From: David Port @ ENRON 11/10/2000 01:46 PM To: Shona Wilson/NA/Enron@Enron cc: Sally Beck/HOU/ECT@ECT, Ted Murphy/HOU/ECT@ECT Subject: Fundamental Operating Standards This is the first time I have seen these - have they been rolled out ? I would be interested to see the format of the exception reporting that attaches to these standards that you mentioned - did you have anything particular in mind ? I had a few of my own ideas for some diagnostic measures of the extent to which these standards are being adhered to - see what you think: Transactions are recorded accurately and timely (completeness, accuracy) Daily report of "holdovers" by commodity group (trades not booked in time for daily cut - off, including counterparty, volume, price etc) Report of P&L effect of booking errors as they transpire, including responsibility Daily Management P&L and Position reporting is accurate and timely (completeness, accuracy) Periodic qualitative review by RAC (i.e. Is it sufficient by reference to the Risk Management Policy - does it show delta gamma vega as a term structure etc....) NB: the point about "Reports issued on next day of trading at a commercially pre-determined time" conflicts with the Risk Managemet Policy, which says "...before any subsequent trading ocurrs". I think the diagnostic measure should be, for each commodity DPR a report daily of all those signed off as final (note I do not neccessarily mean "officialized") after the relevant market opening time (usuaully 7.30 am) Timely confirmation and execution of transactions (completeness, accuracy, existence) Monthly report of all unmatched confirmations: - outstanding inward confirmations (i.e. sent out, not signed) - outstanding outward confirmations (i.e deal done, confirm not sent) - outstanding mismatched or disputed confirmations showing deal trade date, start date, commodity, counterparty, MTM value, aged Settlements with counterparties occurs accurately and timely (non CACS, non Dashed deals) Monthly report of cumulative amounts of all unmatched or unapplied cash: Unapplied cash by counterparty, in original denomination, including deal reference if any Unmatched amounts by deal, where settled amount differs from maturing forward MTM value One additional thing that ocurred to me was the fact that those responsible for supplying the information are also those responsible for the operation underlying it in some sense, so the obvious pitfalls of self - assessment will come into play here. Perhaps the "pilot" report should be put together somehow independently. Views ? DP
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