<PAGE>
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 08/24/1999
_____________________________________________________________________________
2. State Identification Number:
WI Not Applicable
_____________________________________________________________________________
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 Marshall Funds, Inc.:
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 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 August 24, 1999 included in the accompanying Management
Statement Regarding Compliance with Certain Provisions of the Investment Company
Act of 1940. Management is responsible for Marshall Funds, Inc.'s compliance
with those requirements. Our responsibility is to express an opinion on
management's assertion about Marshall Funds, Inc.'s 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 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 August 24, 1999, and with respect to agreement
of security purchases and sales, for the period from July 9, 1999 (the date of
our last examination) through August 24, 1999:
[BULLET] Count and inspection of all securities located in the vault of the
Marshall & Ilsley Trust Company without prior notice to management;
[BULLET] Confirmation of all securities held by institutions in book entry
form (Chase Manhattan Bank and Depository Trust Company);
[BULLET] Confirmation of all securities of the Marshall International Stock
Fund with State Street Bank and Trust Company, the custodian of the
Fund, and with BPI Global Asset Management, the investment sub-
advisor;
[BULLET] Confirmation of tax-exempt mutual funds owned by Marshall Funds,
Inc. with transfer agents;
[BULLET] Reconciliation of all such securities to the books and records of
Marshall Funds, Inc. and the Marshall & Ilsley Trust Company;
[BULLET] Confirmation of all repurchase agreements with brokers and
agreement of underlying collateral with Marshall & Ilsley Trust
Company records; and
[BULLET] 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 August 24, 1999 with respect to securities
reflected in the investment account of the 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
October 6, 1999
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MARSHALL FUNDS
Marshall Your Resources
Management Statement Regarding Compliance
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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 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 effective internal controls over compliance
with those requirements. We have performed an evaluation of the Company's
compliance with the requirements for subsection (b) and (c) of Rule 17f-2 as
of August 24, 1999 and from July 9, 1999 through August 24, 1999.
Based on this evaluation, we assert that the Company was in compliance
with the requirements of subsection (b) and (c) of Rule 17f-2 of the
Investment Company Act of 1940 as of August 24, 1999 and from July 9, 1999
through August 24, 1999 with respect to securities reflected in the
investment account of the Company.
Marshall Funds, Inc.
By: /s/ John M. Blaser
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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
