Report of Independent Auditors
The Board of Directors and Shareholders
Hilliard-Lyons Government Fund, Inc.
We have audited the accompanying statement of assets and
liabilities, including the schedule of portfolio investments,
of the Hilliard-Lyons Government Fund, Inc. (the Fund) as of
August 31, 2000, and the related statement of operations for
the year then ended, statement of changes in net assets for
each of the two years in the period then ended and the
financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and financial highlights.
Our procedures included confirmation of securities owned as of
August 31, 2000, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of the Fund as of August 31,
2000, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the
period then ended and its financial highlights for each of the
five years in the period then ended, in conformity with
accounting principles generally accepted in the United States.
\s\Ernst & Young
September 26, 2000
Louisville, Kentucky
