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TITLE VICE PRES & SEC'Y
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Report of Independent Auditors on Internal Control
The Board of Directors and Shareholders
Princor Cash Management Fund, Inc.
In planning and performing our audit of the financial statements of Princor Cash
Management Fund, Inc. for the year ended October 31, 1997, we considered its
internal control, including control activities 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 internal control.
The management of Princor Cash Management Fund, Inc. is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs. Generally, controls that are relevant to an
audit pertain to the entity's objective of preparing financial statements for
external purposes that are fairly presented in conformity with generally
accepted accounting principles. These controls include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or irregularities
may occur and not be detected. Also, projection of any evaluation of internal
control 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 internal control would not necessarily disclose all matters
in internal control 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 specific
internal control components 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 internal control, including
control for activities safeguarding securities, that we consider to be material
weaknesses as defined above as of October 31, 1997.
This report is intended solely for the information and use of management and the
Board of Directors of Princor Cash Management Fund, Inc. and the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
Des Moines, Iowa
November 26, 1997
SPECIAL MEETING OF SHAREHOLDERS PRINCOR CASH MANAGEMENT FUND, INC.
HELD SEPTEMBER 16, 1997
1.Election of the Board of Directors.
For Withheld
Davis 474,868,466 18,710,706
Ehrle 474,584,207 18,994,965
Ferguson 475,010,196 18,568,975
Gilbert 474,942,281 18,636,891
Griswell 474,821,905 18,757,267
Jones 475,021,635 18,557,536
Keller 474,689,162 18,890,009
Lukavsky 474,746,037 18,833,133
Peebler 474,099,254 19,479,917
2.Ratification of selection of Ernst & Young LLP as independent public auditors.
In Favor Opposed Abstain
472,256,851 13,023,679 8,298,641
3.Approval of name change to Principal Cash Management Fund, Inc.
In Favor Opposed Abstain
465,803,211 14,092,571 13,683,389
4.Approval of modification of management agreement.
In Favor Opposed Abstain
445,346,374 35,584,301 12,648,496
5.Defeat of proposal to eliminate the fundamental investment restriction
regarding the purchase of shares of other investment companies.
In Favor Opposed Abstain Broker Non-Votes
242,055,220 20,637,250 17,322,711 213,563,990
6.Defeat of proposed change to the fundamental investment restriction with
respect to diversification requirements.
In Favor Opposed Abstain Broker Non-Votes
239,753,774 22,517,642 17,743,764 213,563,990
