BANKING & FINANCE - Oct. 2, 1996

Fed Hires Accounting Firm in Response to GAO Report: The accounting firm Coopers & Lybrand will conduct audits at the Federal Reserve banks in Los Angeles, Philadelphia and Atlanta in response to a General Accounting Office report that found serious accounting problems in the banks’ cash vault. The move was disclosed in a letter by Federal Reserve Board Chairman Alan Greenspan that was released as part of a formal GAO report on the L.A. bank’s problems. An earlier draft of the report asserted that incorrect data was being entered into the bank’s accounting system and that serious internal control problems exist. Greenspan’s letter sharply disputed the GAO assertions, noting that an audit conducted by Fed staff in the L.A. vault on Sept. 8 showed all cash and coins were properly accounted for. In response, the GAO said it was standing firm on its conclusions.