Independent Auditors' Report
To the Board of Directors of
Scout Capital Preservation Fund, Inc.
and
the Securities and Exchange Commission:
RE: Scout Capital Preservation Fund, Inc.
Form N-17f-2
File Number 811-08511
We have examined management's assertion about SCOUT CAPITAL
PRESERVATION FUND, INC.'s (the "Company's") compliance with certain
rules under the Investment Company Act of 1940 (the "Act") as of June
30, 1998, and for the period April 30, 1998 through June 30, 1998,
included in the accompanying Management Statement Regarding Compliance
with Certain Provisions of the Investment Company Act of 1940.
Management is responsible for the Company's compliance with those
requirements. Our responsibility is to express an opinion on
management's assertion about the Company's compliance based on our
examination.
Our examination was made in accordance with standards established by
the American Institute of Certified Public Accountants and,
accordingly, included examining, on a test basis, evidence about the
Company's compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances. Included
among our procedures were the following tests performed as of June 30,
1998, and for the period April 30, 1998 through June 30, 1998, with
respect to securities of SCOUT CAPITAL PRESERVATION FUND, INC., without
prior notice to management:
* Securities owned as of the close of business on June 30, 1998, shown
by the books and records were verified with the custodian, UMB Bank,
n.a., which verification includes confirmation of securities with the
Federal Reserve Bank, which uses the book entry method of accounting
for securities;
* Securities purchased/sold but not received/delivered, hypothecated,
pledged, placed in escrow, or out for transfer with brokers, pledgees
and/or transfer agents were verified to supporting data where the
securities were in-transit resulting from purchase or sale
transactions;
* Reconciliation of all such securities to the books and records of the
Company and the Custodian.
We believe that our examination provides a reasonable basis for our
opinion. Our examination does not provide a legal determination on the
Company's compliance with specified requirements.
In our opinion, management's assertion that Scout Capital Preservation
Fund, Inc. was in compliance with certain provisions of Rule 17f-2 of
the Investment Company Act of 1940 as of June 30, 1998, is fairly
stated, in all material respects.
This report is intended solely for the information and use of
management of Scout Capital Preservation Fund, Inc. and the Securities
and Exchange Commission and should not be used for any other purpose.
Kansas City, Missouri
September 24, 1998
Washington, D.C. 20549
FORM N-17f-2
Certificate of Accounting of Securities and Similar Investments
in the Custody of Management Investment Companies
Pursuant to Rule 17f-2 [17 CFR 270.17f-2]
1. Investment Company Act File Number: Date examination completed:
811-08511 June 30, 1998
2. State Identification Number:
AL *
AK 98 02648
AZ S-0057440-QUAL
AR 85-M0144-01
CA *
CO IC-98-14-096
CT SI46025
DE *
DC *
FL *
GA 56-003044
HI *
ID 49022
IL 9838943
IN 98-0154IC
IA I-40771
KS 98S0000983
KY M34790
LA 54726
ME MF98-8228
MD SM980388
MA *
MI 227380
MN R-40432.1
MS MF-98-02-110
MO 1998-00212
MT 38632
NE O24050
NV *
NH *
NJ *
NM 981974
NY S 28 21 76
NC 7539
ND 63189
OH 13027
OK I-119098
OR 98-0230
PA 98-02-045MF
RI *
SC MF11349
SD 14240
TN M98-2355
TX C-55304-000-00
UT B00046215
VT 2/11/98-02
VA 2629
WA C-58245
WV MF-24532
WI 344040-03
WY 20815
PUERTO RICO
Other (specify):
*Indicates Fund is registered in state but state does not issue
identification numbers
3. Exact name of investment company as specified in registration statement:
Scout Capital Preservation Fund, Inc.
4. Address of principal executive office: (number, street, city, state,
zip code)
700 Karnes Blvd, BMA Tower, Kansas City, Missouri 64108
INSTRUCTIONS
This Form must be completed by the investment companies that have
custody of securities or similar investments.
Investment Company
1. All items must be completed by the investment company.
2. Give this Form to the independent public accountant who, in
compliance with Rule 17f-2 under the Act and applicable state law,
examines securities and similar investments in the custody of the
investment company.
Accountant
3. Submit this Form to the Securities and Exchange Commission and
appropriate state securities administrators when filing the certificate
of accounting required by Rule 17f-2 under the Act and applicable state
law. File the original and one copy with the Securities and Exchange
Commission's principal office in Washington, D.C., one copy with the
regional office for the region in which the investment company's
principal business operations are conducted, and one copy with the
appropriate state administrator(s), if applicable.
THIS FORM MUST BE GIVEN TO YOUR INDEPENDENT PUBLIC ACCOUNTANT
Note: The estimated average burden hours are made solely for purposes
of the Paperwork Reduction Act, and are not derived from a
comprehensive or even a representative survey or study of the costs of
SEC rules and forms. Direct any comments concerning the accuracy of
the estimated average burden hours for compliance with SEC rules and
forms to Kenneth A. Fogash, Deputy Executive Director, U.S. Securities
and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 and Gary Waxman, Clearance Officer, Office of Management and
Budget, Room 3208 New Executive Office Building, Washington, D.C.
20503.
<PAGE>
Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
Management believes that Scout Capital Preservation Fund, Inc. was in
compliance with the provisions of Rule 17f-2 of the Investment Company Act
of 1940 as of June 30, 1998, and during the period April 30, 1998
(prior date of Management's Statement Regarding Compliance with Certain
Provisions of the Investment Company Act of 1940) through June 30, 1998,
with respect to securities reflected in the investment account of Scout
Capital Preservation Fund, Inc.
SCOUT CAPITAL PRESERVATION FUND, INC.
By /s/Laurence J. Schmidt
Laurence J. Schmidt, Senior Vice President
