TSP board defends auditing work done by Andersen

The auditing firm under investigation for its role in the Enron scandal also counts among its clients the board that runs the Thrift Savings Plan, the government's 401k-style retirement savings plan. The Federal Retirement Thrift Investment Board, which manages the TSP, has used Andersen to audit its financial statements since 1998, according to Tom Trabucco, a spokesman for the board. The board is pleased with Andersen's work so far, and has no plans to review the firm's audits, Trabucco said. "All of our contracts are competitive, and we have no reason to question the work Andersen has done for us," he said. "We think they've done a fine job." Recent allegations of document-shredding and shoddy accounting practices by Andersen and Enron have called into question the companies' business practices. Andersen audited Enron's financial statements. Last Friday, the Office of Management and Budget (OMB) directed the General Services Administration to review 106 existing contracts with Enron and Andersen and, if necessary, begin suspension or debarment proceedings against the two companies. Ten federal agencies had almost $60 million in contracts with one or both of the companies as of the third quarter of fiscal 2001, according to OMB. Trabucco said the TSP board is not worried about the accuracy of its audits, particularly since the Labor Department's Pension and Welfare Benefits Administration and their auditor, KPMG, routinely perform a series of audits of the TSP. The Labor Department oversees the activities of the Thrift Savings Board. "We are the most audited agency in the government," Trabucco said. About $100 billion is invested in the Thrift Savings Plan's five funds. According to Trabucco, the board has not received any phone calls from federal employees worried about their investments. The Federal Retirement Thrift Investment Board awarded Andersen a three-year contract in 1998 with the option of extending it for two years. The board's contract with Andersen is in its fourth year, but Trabucco would not say whether the agency plans to do future business with the firm. The board will decide by Sept. 30 whether to extend its contract with Andersen. "We will hold a competition for future contracts, as we have consistently done," he said.