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<PAGE> PAGE 2
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013 B030001 02116
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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SIGNATURE STEPHEN A. KEEN
TITLE GENERAL COUNSEL
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000201801
<NAME> Federated Municpal Securities Fund, Inc.
<SERIES>
<NUMBER> 001
<NAME> Federated Municpal Securities Fund, Inc.-Class A
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Mar-31-2000
<PERIOD-END> Mar-31-2000
<INVESTMENTS-AT-COST> 546,801,015
<INVESTMENTS-AT-VALUE> 558,564,312
<RECEIVABLES> 10,829,647
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 569,393,959
<PAYABLE-FOR-SECURITIES> 12,617,499
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,604,532
<TOTAL-LIABILITIES> 15,222,031
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 587,871,301
<SHARES-COMMON-STOCK> 47,619,224
<SHARES-COMMON-PRIOR> 51,772,752
<ACCUMULATED-NII-CURRENT> 1,573,343
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (47,036,013)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,763,297
<NET-ASSETS> 471,475,129
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 34,926,033
<OTHER-INCOME> 0
<EXPENSES-NET> (6,347,252)
<NET-INVESTMENT-INCOME> 28,578,781
<REALIZED-GAINS-CURRENT> (30,801,658)
<APPREC-INCREASE-CURRENT> (26,542,320)
<NET-CHANGE-FROM-OPS> (28,765,197)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (24,804,613)
<DISTRIBUTIONS-OF-GAINS> (1,587,020)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,897,073
<NUMBER-OF-SHARES-REDEEMED> (15,749,468)
<SHARES-REINVESTED> 1,698,867
<NET-CHANGE-IN-ASSETS> (114,337,510)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (12,835,164)
<OVERDISTRIB-NII-PRIOR> (3,185,244)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,369,773
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,056,799
<AVERAGE-NET-ASSETS> 505,824,595
<PER-SHARE-NAV-BEGIN> 10.870
<PER-SHARE-NII> 0.580
<PER-SHARE-GAIN-APPREC> (1.020)
<PER-SHARE-DIVIDEND> (0.500)
<PER-SHARE-DISTRIBUTIONS> (0.030)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 9.900
<EXPENSE-RATIO> 0.92
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.000
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000201801
<NAME> Federated Municpal Securities Fund, Inc.
<SERIES>
<NUMBER> 002
<NAME> Federated Municpal Securities Fund, Inc.-Class B
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Mar-31-2000
<PERIOD-END> Mar-31-2000
<INVESTMENTS-AT-COST> 546,801,015
<INVESTMENTS-AT-VALUE> 558,564,312
<RECEIVABLES> 10,829,647
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 569,393,959
<PAYABLE-FOR-SECURITIES> 12,617,499
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,604,532
<TOTAL-LIABILITIES> 15,222,031
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 587,871,301
<SHARES-COMMON-STOCK> 7,281,605
<SHARES-COMMON-PRIOR> 8,163,539
<ACCUMULATED-NII-CURRENT> 1,573,343
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (47,036,013)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,763,297
<NET-ASSETS> 72,095,338
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 34,926,033
<OTHER-INCOME> 0
<EXPENSES-NET> (6,347,252)
<NET-INVESTMENT-INCOME> 28,578,781
<REALIZED-GAINS-CURRENT> (30,801,658)
<APPREC-INCREASE-CURRENT> (26,542,320)
<NET-CHANGE-FROM-OPS> (28,765,197)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,215,677)
<DISTRIBUTIONS-OF-GAINS> (249,229)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,034,706
<NUMBER-OF-SHARES-REDEEMED> (2,075,020)
<SHARES-REINVESTED> 158,380
<NET-CHANGE-IN-ASSETS> (114,337,510)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (12,835,164)
<OVERDISTRIB-NII-PRIOR> (3,185,244)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,369,773
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,056,799
<AVERAGE-NET-ASSETS> 80,149,355
<PER-SHARE-NAV-BEGIN> 10.870
<PER-SHARE-NII> 0.480
<PER-SHARE-GAIN-APPREC> (1.010)
<PER-SHARE-DIVIDEND> (0.410)
<PER-SHARE-DISTRIBUTIONS> (0.030)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 9.900
<EXPENSE-RATIO> 1.81
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.000
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000201801
<NAME> Federated Municpal Securities Fund, Inc.
<SERIES>
<NUMBER> 003
<NAME> Federated Municpal Securities Fund, Inc.-Class C
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Mar-31-2000
<PERIOD-END> Mar-31-2000
<INVESTMENTS-AT-COST> 546,801,015
<INVESTMENTS-AT-VALUE> 558,564,312
<RECEIVABLES> 10,829,647
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 569,393,959
<PAYABLE-FOR-SECURITIES> 12,617,499
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,604,532
<TOTAL-LIABILITIES> 15,222,031
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 587,871,301
<SHARES-COMMON-STOCK> 1,070,672
<SHARES-COMMON-PRIOR> 1,551,636
<ACCUMULATED-NII-CURRENT> 1,573,343
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (47,036,013)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,763,297
<NET-ASSETS> 10,601,461
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 34,926,033
<OTHER-INCOME> 0
<EXPENSES-NET> (6,347,252)
<NET-INVESTMENT-INCOME> 28,578,781
<REALIZED-GAINS-CURRENT> (30,801,658)
<APPREC-INCREASE-CURRENT> (26,542,320)
<NET-CHANGE-FROM-OPS> (28,765,197)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (558,491)
<DISTRIBUTIONS-OF-GAINS> (45,144)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,858,031
<NUMBER-OF-SHARES-REDEEMED> (2,376,325)
<SHARES-REINVESTED> 37,330
<NET-CHANGE-IN-ASSETS> (114,337,510)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (12,835,164)
<OVERDISTRIB-NII-PRIOR> (3,185,244)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,369,773
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,056,799
<AVERAGE-NET-ASSETS> 13,931,950
<PER-SHARE-NAV-BEGIN> 10.870
<PER-SHARE-NII> 0.480
<PER-SHARE-GAIN-APPREC> (1.010)
<PER-SHARE-DIVIDEND> (0.410)
<PER-SHARE-DISTRIBUTIONS> (0.030)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 9.900
<EXPENSE-RATIO> 1.80
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.000
</TABLE>
Item 77K:
Change of Independent Auditor
On May 19, 1999, the Fund's Board of Directors, (the "Directors") upon the
recommendation of the Audit Committee of the Directors, requested and
subsequently accepted the resignation of Deloitte & Touche LLP ("D&T") as
the Fund's independent auditors. D&T's reports on the fund's financial
statements for the fiscal years ended March 31, 1998 and March 31, 1999,
contained no adverse opinion or disclaimer of opinion nor were they qualified
or modified as to uncertainty, audit scope or accounting principles. During
the Fund's fiscal years ended March 31, 1998 and March 31, 1999: (i) there
were no disagreements with D&T on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of D&T, would have
caused it to make reference to the subject matter of the disagreements in
connection with its reports on the financial statements for such years; and
(ii) there were no reportable events of the kind described in Item
304(a)(1)(v) of Regulation S-K under the Securities Act of 1934, as amended.
The Fund, by action of its Directors, upon the recommendation of the Audit
Committee of the Directors, has engaged Ernst & Young LLP ("E&Y") as the
independent auditors to audit the fund's financial statements for the fiscal
year ended March 31, 2000. During the Fund's fiscal years ended March 31, 1998
and March 31, 1999, neither the Fund nor anyone on its behalf has consulted
E&Y on items which (i) concerned the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Fund's financial statements or (ii)
concerned the subject of a disagreement (as defined in paragraph (a) (1) (iv)
of Item 304 of Regulation S-K) of reportable events (as described in paragraph
(a)(1)(v) of said Item 304).
Report of Ernst & Young LLP, Independent Auditors
To the Board of Directors of
Federated Municipal Securities Fund, Inc.
In planning and performing our audit of the financial statements of
Federated Municipal Securities Fund, Inc. (the "Fund") for the year
ended March 31, 2000, we considered its internal control, including
control activities for safeguarding securities, 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 internal control.
The management of the Fund 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 internal control. Generally,
internal controls that are relevant to an audit pertain to the Fund's
objective of preparing financial statements for external purposes that
are fairly presented in conformity with generally accepted accounting
principles. Those internal 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 internal control may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or
procedures 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 error or fraud
in amounts that would be material in relation to the consolidated
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, including control activities for safeguarding securities, and
its operation that we consider to be material weaknesses as defined
above as of March 31, 2000.
This report is intended solely for the information and use of the board
of directors and management of Federated Municipal Securities 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.
ERNST & YOUNG LLP
May 15, 2000
May 26, 2000
Securities and Exchange Commission
Mail Stop 11-3
450 5th Street, N.W.
Washington, D.C. 20549
Dear Sirs/Madams:
We have read and agree with the comments in Sub-Item 77K of Federated
Municipal Securities Fund, Inc. N-SAR for the year ended March 31,
2000.
Yours truly,
Deloitte & Touche LLP
