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<PAGE> PAGE 6
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SIGNATURE MARY B. O'BYRNE
TITLE SECRETARY
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
Report of Independent Auditors
To the Shareholders and Board of Directors of
Daruma Mid-Cap Value Fund
In planning and performing our audit of the financial statements of
Daruma Mid-Cap Value Fund for the year ended June 30, 1999, we
considered its internal control, including control activities
for safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of
Form N-SAR, and not to provide assurance on the internal control.
The management of Daruma Mid-Cap Value Fund is responsible for
establishing and maintaining internal control. In fulfilling
this responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial
statements for external purposes that are fairly presented in
conformity with generally accepted accounting principles.
Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or
fraud may occur and not be detected. Also, projection of any
evaluation of internal control to future periods is subject
to the risk that is may become inadequate because of changes
in conditions of that the effectiveness of the design and
operation may deteriorate.
Our consideration of internal control would not necessarily
disclose all matters in internal control that may might be
material weaknesses under standards established by the
American Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation of
one or more of the specific internal control components does
not reduce to a relatively low level the risk that errors or
fraud in amounts that would be material in relation to the
financial statements being audited may occur and not be
detected within a timely period by employees in the normal
course of performing their assigned functions.
However, we noted no matters involving internal control and
its operation, including controls for safeguarding securities
that we consider to be material weaknesses as defined above
at June 30, 1999.
This report is intended solely for the information and use of
the board of directors and management for Daruma Mid-Cap Value
Fund and the Securities and Exchange Commission and is not
intended to be and should not be used by anyone other that
these specific parties.
ERNST & YOUNG LLP
August 6, 1999
