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SIGNATURE GERARD J. FENERTY
TITLE TREASURER
<PAGE>
[DELOITTE & TOUCHE LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To 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. (the "Program") for the year ended
December 31, 1998 (on which we have issued our report dated February 22, 1999),
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 Program's
internal control.
The management of the Program 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 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
the internal control may become inadequate because of changes in conditions, or
that the degree of compliance with policies or procedures may deteriorate.
Our consideration of the Program's internal control would not necessarily
disclose all matters in the 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 internal control components does not reduce to a
relatively low level the risk that misstatements caused by error 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 the Program's internal control and its operation, including
controls for safeguarding securities, that we consider to be material weaknesses
as defined above as of December 31, 1998.
This report is intended solely for the information and use of management, The
Board of Directors of the GNMA Fund Investment Accumulation Program, 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.
Deloitte & Touche LLP
February 22, 1999
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<PAGE>
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 190,313,208
<INVESTMENTS-AT-VALUE> 194,689,077
<RECEIVABLES> 1,153,026
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