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SIGNATURE RICHARD KAUFMAN
TITLE EXEC. VICE PRESIDENT
<PAGE>
[letterhead for STAVISKY KNITTLE TOCCI & GOLDSTEIN LLP]
S K T G STAVISKY KNITTLE TOCCI & GOLDSTEIN LLP
Certified Public Accountants and Business Advisors
342 Madison Avenue, Suite 950
New York, New York 10173
Telephone 212-682-1414
Independent Auditor's Report Facsimile 212-599-4278
To the Shareholders and
Board of Directors of
Sterling Capital Corporation:
In planning and performing our audit of the financial statements of Sterling
Capital Corporation for the year ended December 31, 1998, 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, not to provide assurance on internal control.
The managment of Sterling Capital Corporation is responsible for establishing
and maintaining internal control. In fulfilling this responsibility, estimates
and judgements 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 general accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, error 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 it may become inadequate because of
changes in conditions or 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 might be material weaknessess 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 internal control components does not reduce to a relatively low level the
risk that misstatements caused by error 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 operations, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above as of
December 31, 1998.
This report is intended solely for the information and use of management, the
Board of Directors of Sterling Capital Corporation, and the Securities and
Exchange Commission.
/s/Stavisky Knittle Tocci & Goldstein LLP.
- -------------------------------------------
Stavisky Knittle Tocci & Goldstein LLP.
New York, NY
February 23, 1999
Member of the American Institute of Certified Public Accountants
SEC and Private Companies Practice Sections
