Freddie Mac Delays Releasing Revised Numbers
By David S. Hilzenrath and Kathleen Day
Washington Post Staff Writers
Friday, September 26, 2003; Page E01
Freddie Mac, the giant mortgage funding company, yesterday postponed until November the release of corrected financial statements and announced that the errors for the past three years could exceed its previous estimate of up to $4.5 billion.
Chief Financial Officer Martin F. Baumann said in an interview that the company postponed the correction because it discovered a glitch this week in a new system installed as part of an overhaul of company accounting announced in January. The system was generating numbers related to Freddie Mac fees that appeared out of synch, Baumann said.
"Unfortunately, trying to rush a new accounting system into production, somebody missed a flaw in the logic of the system as to how we were going to account for certain fees," he said.
Baumann said the accounting errors could eventually total $4.5 billion to $4.7 billion, though he added that he couldn't even state that range with precision. "We don't think it's going to be materially above" $4.5 billion, he said.
more
http://www.washingtonpost.com/wp-dyn/articles/A2081-2003Sep25.html