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<PAGE> PAGE 2
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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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<PAGE> PAGE 7
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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SIGNATURE JOSEPH REZABEK
TITLE ASST. VICE PRESIDENT
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and
Board of Trustees of
Alliance Government Reserves
In planning and performing our audit of the financial statements of
Alliance Government Reserves, a series investment company consisting
of Alliance Government Reserves Portfolio and Alliance Treasury Re-
serves Portfolio for the year ended June 30, 1999, we considered its
internal control, including control activities for safeguarding secu-
rities, 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 in-
ternal control.
The management of Alliance Government Reserves is responsible for es-
tablishing and maintaining internal control. In fulfilling this re-
sponsibility, 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 objec-
tive 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 internal control, error or fraud
may occur and may not be detected. Also, projection of any evaluation
of internal control to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the ef-
fectiveness of the design and operation may deteriorate.
Our consideration of internal control would not necessarily disclose
all matters in internal control that might be material weaknesses un-
der standards established by the American Institute of Certified Pub-
lic Accountants. A material weakness is a condition in which the de-
sign 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 de-
tected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters in-
volving internal control and its operation, including controls for
safeguarding securities, that we consider to be material weaknesses as
defined above as of June 30, 1999.
This report is intended solely for the information and use of manage-
ment, the Board of Trustees of Alliance Government Reserves and the
Securities and Exchange Commission.
McGladrey & Pullen, LLP
New York, New York
July 23, 1999
