Dec 12 (Reuters) - Macy's said on Thursday a re-evaluation of its financials

showed that the department store chain's internal control, including proper record maintenance,

was not effective as of February this year.

The retailer had initiated an evaluation in late November after it found that an employee

hid as much as $154 million in expenses over the years. Consequently, the company delayed its

third-quarter results to Dec. 11.

Macy's said its CEO Tony Spring and financial chief Adrian Mitchell, under the board's

oversight, re-evaluated the effectiveness of the internal control and noted that its financial

reporting was not effective as of Feb. 3, due to the material weakness.

The department store chain said it was implementing changes to improve its internal control

and to remediate the material weakness.