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SIGNATURE MICHELLE A. WHALEN
TITLE SR. ADMINISTRATOR
<TABLE> <S> <C>
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<NAME> STRATTON MONTHLY DIVIDEND REIT SHARES,INC.
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TAIT, WELLER & BAKER
Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON INTERNAL CONTROL STRUCTURE
Board of Directors
Stratton Monthly Dividend REIT Shares, Inc.
Plymouth Meeting, Pennsylvania
In planning and performing our audit of the financial statements of
Stratton Monthly Dividend REIT Shares, Inc. for the period ended December
31, 1998, 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 Fund 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, 1998.
This report is intended solely for the information and use of management
and the Securities and Exchange Commission, and should not be used for any
other purpose.
Philadelphia, Pennsylvania
January 16, 1998
