updated 10/21/2008 10:03:15 AM ET 2008-10-21T14:03:15

The government has selected two major accounting firms to help it manage the $700 billion rescue program for the financial system.

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The Treasury Department said Tuesday it had chosen PricewaterhouseCoopers to be the auditor for the program. Ernst & Young will provide general accounting support.

The two firms will work on the part of the rescue program that is handling the purchase of troubled assets from banks as a way of encouraging them to resume more normal lending.

Treasury said that Ernst & Young will be paid $492,006.95 initially while Pricewaterhouse Coopers will be paid $191,469.27 for its services initially. The two contracts last until Sept. 30, 2011.

In a statement, Treasury said that the two firms will help the department with accounting and internal control services that will be needed "to administer the complex portfolio of troubled assets the department will purchase, including whole loans and mortgage-backed securities."

The govenrment still must select the five to 10 asset management firms that will actually run the program. Those selections could come as soon as this week.

Last week, Treasury Secretary Henry Paulson announced that the government would use $250 billion of the $700 billion rescue program to make direct purchases of bank stock as a way of boosting the banks' capital reserves. That will leave $100 billion of the initial $350 billion in the first phase of the program to purchase troubled assets.

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