<PAGE> PAGE 1
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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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<PAGE> PAGE 15
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<PAGE> PAGE 16
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<PAGE> PAGE 17
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<PAGE> PAGE 18
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<PAGE> PAGE 19
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<PAGE> PAGE 20
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<PAGE> PAGE 21
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SIGNATURE RICHARD A CLEMENS
TITLE MGR/FINANCIAL REPTG
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<FN>
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</TABLE>
<TABLE> <S> <C>
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<NAME> THE U.S. GOVERNMENT BOND FUND
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<FN>
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<FN>
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The Board of Trustees of
The Flex-funds:
In planning and performing our audit of the financial
statements of The Flex-funds for the year ended
December 31, 1997, we considered its internal controls,
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 controls.
The management of The Flex-funds is responsible for
establishing and maintaining internal controls. In fulfilling
this responsibility, estimates and judgments by management
are required to assess the expected benefits and related costs
of internal control policies and procedures. Two of the
objectives of internal controls 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 internal controls, errors
or irregularities may occur and not be detected. Also, projection
of any evaluation of the internal controls to future periods is
subject to the risk that they may become inadequate because
of changes in conditions or that the effectiveness of the design
and operation may deteriorate.
Our consideration of the internal controls would not necessarily
disclose all matters in the internal controls 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 elements does not reduce to a relatively
low level the risk 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 controls, 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.
KPMG PEAT MARWICK LLP
Columbus, Ohio
February 12, 1998
