To the Board of Directors of
The Vanguard Group, Inc.
We have examined the accompanying description of controls related to the
interfund lending program of The Vanguard Group, Inc. Our examination
included procedures to obtain reasonable assurance about whether the
controls included in the accompanying description were suitably designed
to achieve the control objectives specified in the description, if those
controls were complied with satisfactorily. The control objectives were
specified by the Vanguard Group, Inc. 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.
Because The Vanguard Group, Inc. interfund lending program is not yet
operational, these procedures have not yet been placed in operation.
Therefore, we did not perform procedures to determine the operating
effectiveness of controls for any period. Accordingly, we express no
opinion on the operating effectiveness of any aspects of The Vanguard
Group, Inc.'s controls, individually or in the aggregate.
In our opinion, the accompanying description of the aforementioned
application presents fairly, in all material respects, the relevant aspects of
The Vanguard Group Inc.'s controls as of December 22, 1999. Also, in
our opinion, the controls, as described, are suitably designed to provide
reasonable assurance that the specified control objectives would be
achieved if the described controls were complied with satisfactorily.
The description of controls at The Vanguard Group, Inc. is as of
December 22, 1999 and any projection of such information to the future is
subject to the risk that, because of change, the description may no longer
portray the controls in existence. The potential effectiveness of specific
controls at The Vanguard Group, Inc. 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 use by the management of The Vanguard
Group, Inc. and the Securities and Exchange Commission.
December 22, 1999
