INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of
The James Advantage Funds:
In planning and performing our audit of the financial statements of The James
Advantage Funds, including The Golden Rainbow Fund, The James Small Cap Fund,
The James Market Neutral Fund and The James Large Cap Plus Fund (the "Funds"),
for the year ended June 30, 2000 (on which we have issued our report dated
August 11, 2000), we considered their 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 Funds' internal control.
The management of the Funds 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 of America. Those controls include the safeguarding of
assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in any internal control, misstatements due to
error or fraud may occur and not be detected. Also, projections of any
evaluation of internal control to future periods are subject to the risk that
the internal control may become inadequate because of changes in conditions or
that the degree of compliance with policies or procedures may deteriorate.
Our consideration of the Funds' 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 the
Funds' internal control and their operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above as of
June 30, 2000.
This report is intended solely for the information and use of management, the
Trustees and Shareholders of The James Advantage Funds, and the Securities and
Exchange Commission and is not intended to be and should not be used by anyone
other than these specified parties.
Dayton, Ohio
August 11, 2000
