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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)
_____________________________________________________________________________
1. Investment Company Act File Number: Date examination completed:
811-58433 05/15/98
_____________________________________________________________________________
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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ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
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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 that 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 Large-Cap Growth & Income Fund, the Marshall Mid-Cap Value
Fund, the Marshall Mid-Cap Growth Fund, the Marshall Small-Cap Growth Fund, the
Marshall Equity Income Fund, the Marshall Intermediate Tax-Free Fund, and the
Marshall International Stock Fund) compliance with the requirements of
subsections (b) and (c) of Rule 17f-2 under the Investment Company Act of 1940
(the "Act") as of May 15, 1998 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 Marshall Funds, Inc.'s compliance based upon
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 15, 1998, and with respect to agreement of
security purchases and sales, for the period from August 31, 1997 (the date of
our last examination) through May 15, 1998:
* Count and inspection of all securities located in the vault of Marshall
& Ilsley Trust Company;
* Confirmation of all securities held by institutions in book entry form
(Chase Manhattan Bank, The Depository Trust Company, and Union Bank of
California);
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* Confirmation of all securities of the Marshall International Stock Fund
with State Street Bank and Trust Company which operates as sub-custodian
of the Fund and with Templeton Investment Counsel, Inc., the investment
sub-advisor;
* Confirmation of tax-exempt mutual funds owned by Marshall Funds, Inc.
with transfer agents;
* Reconciliation of all such securities to the books and records of
Marshall Funds, Inc. and Marshall & Ilsley Trust Company;
* Confirmation of all repurchase agreements with brokers and agreement of
underlying collateral with banks; and
* Agreement of five (5) security purchases and five (5) 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 requirements of subsections (b) and (c) of Rule 17f-2 of the
Investment Company Act of 1940 as of May 15, 1998 with respect to securities
reflected in the investment account of Marshall Funds, Inc. 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 26, 1998
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MARSHALL FUNDS
Marshall Your Resources
Management Statement Regarding Compliance
-----------------------------------------
with Certain Provisions of the Investment Company Act of 1940
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We, as members of management of Marshall Funds, Inc. (the "Company"),
are responsible for complying with the requirements of subsections (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 effective internal controls over
compliance with those requirements. We have performed an evaluation of the
Company's compliance with the requirements of subsections (b) and (c) of Rule
17f-2 as of May 15, 1998 and from August 31, 1997 through May 15, 1998.
Based on this evaluation, we assert that the Company was in compliance
with the requirements of subsections (b) and (c) of Rule 17f-2 of the
Investment Company Act of 1940 as of May 15, 1998 and from August 31, 1997
through May 15, 1998 with respect to securities reflected in the investment
account of the Company.
Marshall Funds, Inc.
By: /s/ Jo Dales
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Marshall Funds Investor Services
P.O. Box 1348
1000 North Water Street
Milwaukee, Wisconsin 53201-1348
1-800-236-FUND (3863)
1-414-287-8555
http://www.marshallfunds.com
