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SIGNATURE CREIGHTON H. PEET
TITLE TREASURER
Report of Independent Auditors
To the Shareholders and Board of Directors of
SG Cowen Series Funds, Inc.
In planning and performing our audit of the financial statements of SG Cowen
Series Funds, Inc. (comprising, respectively, SG Cowen Large Cap Value Fund)
for the year ended November 30, 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, and not to provide assurance on the internal control.
The management of SG Cowen Series Funds, 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
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 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 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
November 30, 1998.
This report is intended solely for the information and use of the board of
directors and management of SG Cowen Series Funds, 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.
ERNST & YOUNG LLP
January 8, 1999
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors of Cowen Income + Growth Fund, Inc.
Board of Directors of Cowen Funds, Inc.
Board of Directors of SG Cowen Series Funds, Inc.
SG Cowen Securities Corporation
We have examined the accompanying description of the multiple distribution
system of SG Cowen Securities Corporation (the "Advisor") for calculating
the
net asset value and dividends and distributions with respect to the
allocation of income and expenses to the three classes of shares of the SG
Cowen Group of Funds listed on Exhibit I (the "Funds"). Our examination
included procedures to obtain reasonable assurance about whether (1) the
accompanying description presents fairly, in all material respects, the
aspects of the Advisor's policies and procedures that may be relevant to the
Funds' internal control, (2) the internal control policies and procedures
included in the description were suitably designed to achieve the control
objectives specified in the description if those policies and procedures were
complied with satisfactorily, and the Funds' organization applied the
internal control policies and procedures contemplated in the design of the
Advisor's policies and procedures, and (3) such policies and procedures were
in existence as of November 30, 1998. The control objectives were specified
by the Advisor. Our examination was performed in accordance with standards
established by the American Institute of Certified Public Accountants and
included those procedures we considered necessary in the circumstances to
obtain a reasonable basis for rendering our opinion.
In our opinion, the accompanying description of the aforementioned multiple
distribution system presents fairly, in all material respects, the relevant
aspects of the Advisor's policies and procedures that had been placed in
operation as of November 30, 1998. Also, in our opinion, the policies and
procedures, as described, are suitably designed to provide reasonable
assurance that the specified control objectives would be achieved if the
described policies and procedures were complied with satisfactorily.
In addition to the procedures we considered necessary to render our
opinion as
expressed in the previous paragraph, we applied tests to specific policies
and procedures, listed in the attached description, to obtain evidence about
their effectiveness in meeting the specific control objectives described in
the attached description of the system, during the period from December 1,
1997 to November 30, 1998. The specific policies and procedures and the
nature, timing, extent, and resultsof the tests are listed in the attached
description. In our opinion, the policies and procedures that were tested,
as described in the attached description, were operating with sufficient
effectiveness to provide reasonable, but not absolute, assurance that the
specific control objectives specified in the attached description were
achieved during the period from December 1, 1997 to November 30, 1998
However, the scope of our engagement did not include tests to determine
whether specific control objectives not listed in the attached description
were achieved; accordingly, we express no opinion on the achievement of
control objectives not included in the attached description.
The description of policies and procedures at the Advisor is as of
November 30,
1998, and information about tests of operating effectiveness of specified
policies and procedures covers the period from December 1, 1997 to November
30, 1998. Any projection of such information to the future is subject
to the
risk that, because of change, the description may no longer portray
the system
in existence. The potential effectiveness of specific policies and
procedures at the Advisor is subject to inherent limitations and,
accordingly, errors or fraud may occur and not be detected. Furthermore,
the projection of any conclusions, based on our findings, to future periods
is subject to the risk that changes may alter the validity of such
conclusions.
This report is intended solely for the use by the Board of Directors of the
Funds and management of the Advisor, and the Securities and Exchange
Commission and is not intended to and should not be by anyone other them
these specified parties.
ERNST & YOUNG LLP
New York, New York
January 8, 1999
