Report of Independent Auditors
To the Shareholders and Board of Directors,
MuniHoldings Fund, Inc.
In planning and performing our audit of the financial
statements of MuniHoldings Fund, Inc. for the year ended
April 30, 2000, 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 the internal control.
The management of MuniHoldings Fund, Inc. 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 accounting principles generally accepted in
the United States. 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
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 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 operation, including controls for
safeguarding securities, that we consider to be material
weaknesses as defined above as of April 30, 2000.
This report is intended solely for the information and use of
the Board of Directors and management of MuniHoldings
Fund, Inc. and the Securities and Exchange Commission
and is not intended to be and should not be used by anyone
other than these specified parties.
/s/ Ernst & Young LLP
MetroPark, New Jersey
May 26, 2000
