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022 A000001 BEAR, STEARNS & CO, INC.
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SIGNATURE GERARD J. FENERTY
TITLE TREASURER
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
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<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 206,256,624
<INVESTMENTS-AT-VALUE> 205,601,573
<RECEIVABLES> 1,311,291
<ASSETS-OTHER> 3,533
<OTHER-ITEMS-ASSETS> 1,230,639
<TOTAL-ASSETS> 208,147,036
<PAYABLE-FOR-SECURITIES> 32,713
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<OTHER-ITEMS-LIABILITIES> 345,493
<TOTAL-LIABILITIES> 378,206
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 207,504,142
<SHARES-COMMON-STOCK> 10,090,171
<SHARES-COMMON-PRIOR> 10,435,330
<ACCUMULATED-NII-CURRENT> 1,007,557
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (87,817)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (655,051)
<NET-ASSETS> 207,768,830
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15,627,978
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<EQUALIZATION> (138,164)
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<SHARES-REINVESTED> 639,093
<NET-CHANGE-IN-ASSETS> (12,428,814)
<ACCUMULATED-NII-PRIOR> 835,494
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<PAGE>
Exhibit 77 (B)
[Deloitte & Touche LLP Letterhead]
The Board of Directors,
The GNMA Fund Investment Accumulation Program, Inc.:
In planning and performing our audit of the financial statements
of The GNMA Fund Investment Accumulation Program, Inc. for the
year ended December 31, 1996 (on which we have issued our report
dated February 25, 1997), we considered its internal control
structure, including procedures 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, not to provide assurance on
the internal control structure.
The management of The GNMA Fund Investment Accumulation Program,
Inc. is responsible for establishing and maintaining an internal
control structure. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies
and procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from
unauthorized use or disposition and that transactions are executed
in accordance with management's authorization and recorded
properly to permit preparation of financial statements in
conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and not be detected. Also,
projection of any evaluation of the structure 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 the internal control structure would not
necessarily disclose all matters in the internal control structure
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 the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or
irregularities, 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 internal control structure, including
procedures for safeguarding securities, that we consider to be
material weaknesses as defined above as of December 31, 1996.
This report is intended solely for the information and use of the
Board of Directors, management and the Securities and Exchange
Commission.
/s/ Deloitte & Touche LLP
- ---------------------------------
February 25, 1997
FOR THE PERIOD ENDING 12/31/96
FILE NUMBER 811:2788
SIGNATURE PAGE
This report is signed on behalf of the registrant in the City of
Plainsboro and State of New Jersey on the 25th day of February
1997.
The GNMA Fund Investment
Accumulation Program, Inc.
Witness: /s/ Michael J. Perini By: /s/ Gerard J. Fenerty
--------------------- ---------------------
Michael J. Perini Gerard J. Fenerty
President and Director Treasurer
