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<PAGE> PAGE 2
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<PAGE> PAGE 7
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SIGNATURE OLGA MENDEZ
TITLE OPERATIONS MANAGER
<PAGE>
Sanville & Company
CERTIFIED PUBLIC ACCOUNTANTS
1514 OLD YORK ROAD
ABINGTON, PA 19001
(215) 884-8460
FAX (215) 884-8686
MEMBERS OF
ROBERT F. SANVILLE, CPA AMERICAN INSTITUTE OF
MICHAEL T. BARANOWSKY, CPA CERTIFIED PUBLIC ACCOUNTANTS
PENNSYLVANIA INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of
The Kaufmann Fund, Inc.
In planning and performing our audit of the financial statements of The
Kaufmann Fund, Inc. for the year ended December 31, 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 Kaufmann Fund, Inc. is responsible for establishing
and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgements 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 risks 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, 1997.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
Abington, Pennsylvania [SANVILLE & COMPANY]
February 16, 1998 Certified Public Accountants
