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Form N-17f-2
(As adopted in Release No. IC-17085, July 26, 1989,
effective September 25, 1989, 54 F.R. 30248)
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM N-17f-2
Certificate of Accounting of Securities and Similar Investments In
The Custody of Management Investment Companies
Pursuant to Rule 17-2 (17 CFR 270.17f-2)
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1. Investment Company Act File Number: Date examination completed:
811-58433 6/06/97
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2. State Identification Number:
WI Not Applicable
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3. Exact name of investment company as specified in registration statement:
Marshall Funds, Inc.
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4. Address of principal executive office: (number, street, city, state, zip,
code)
Federated Investors Towers
Pittsburgh, PA 15222-3799
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
the Marshall Funds, Inc. and
the Securities and Exchange Commission:
We have examined management's assertion about Marshall Funds, Inc.'s (a
Wisconsin Corporation which includes the Marshall Money Market Fund-
Investment Shares, the Marshall Money Market Fund-Trust Shares, the Marshall
Government Income Fund, the Marshall Intermediate Bond Fund, the Marshall
Short-Term Income Fund, the Marshall Stock Fund, the Marshall Value Equity
Fund, the Marshall Mid-Cap Stock Fund, the Marshall Small-Cap Stock Fund, the
Marshall Equity Income Fund, the Marshall Intermediate Tax-Free Fund, and the
Marshall International Stock Fund) compliance with certain rules under the
Investment Company Act of 1940 (the "Act") as of May 9, 1997, included in the
accompanying Management Statement Regarding Compliance with Certain
Provisions of the Investment Company Act of 1940. Our examination was made
without prior notice to the management of Marshall Funds, Inc. Management is
responsible for the Marshall Funds, Inc.'s compliance with those
requirements. Our responsibility is to express an opinion on management's
assertion about the compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Marshall Funds, Inc.'s
compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. Included among our procedures
were the following tests performed as of May 9, 1997, and for the period
August 31, 1996 (the date of our last examination) through May 9, 1997, with
respect to agreement of security purchases and sales:
Count and inspection of all securities located in the vault of
M&I Trust;
Confirmation of outstanding balances of corporate notes held in
the vault with the issuer;
Confirmation of all securities held by institutions in book entry
form (Chase Manhattan Bank and The Depository Trust Company);
Confirmation of all securities of the Marshall International
Stock Fund with State Street Bank and Trust Company which
operates as subcustodian of the fund and with Templeton
Investment Counsel, Inc., the investment subadvisor;
Confirmation of tax-exempt mutual funds owned by Marshall Funds,
Inc. with transfer agents;
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Confirmation of collateral for futures contracts with banks;
Confirmation of all repurchase agreements with brokers;
Reconciliation of all such securities to the books and records of
Marshall Funds, Inc. and M&I Trust;
We were unable to perform this procedure for the Marshall
International Stock Fund as the investments are not recorded on
the M&I Trust safekeeping system.
Agreement of five security purchases and five security sales or
maturities since our last report from the books and records of
Marshall Funds, Inc. to broker confirmations.
We believe that our examination provides a reasonable basis for our opinion.
Our examination does not provide a legal determination on Marshall Funds
Inc.'s compliance with specified requirements.
In our opinion, management's assertion that Marshall Funds, Inc. was in
compliance with the above mentioned provisions of Rule 17f-2 of the
Investment Company Act of 1940 as of May 9, 1997, is fairly stated, in all
material respects.
This report is intended solely for the information and use of management of
Marshall Funds, Inc. and the Securities and Exchange Commission and should
not be used for any other purpose.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
June 6, 1997
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Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
We, as members of management of Marshall Funds, Inc. (the "Company"),
are responsible for complying with the requirements of subsection (b) and (c)
of Rule 17F-2, "Custody of Investments by Registered Management Investment
Companies", of the Investment Company Act of 1940. We are also responsible
for establishing and maintaining an effective internal control structure over
compliance with those requirements. We have performed an evaluation of the
Company's compliance with the requirements of subsection (b) and (c) of Rule
17F-2 as of May 9, 1997.
Based on this evaluation, we assert that the Company was in compliance
with those provisions of Rule 17F-2 of the Investment Company Act of 1940 as
of May 9, 1997 with respect to securities reflected in the investment account
of the Company.
Marshall Funds, Inc.
By: /s/ Brooke J. Billick
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Assistant Secretary of Marshall Funds, Inc.
