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<PAGE> PAGE 13
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TITLE GENERAL COUNSEL
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<NAME> MOSAIC INCOME TRUST
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</TABLE>
Deloitte & Touche LLP
University Square
117 Campus Drive
Princeton, New Jersey 08540
Telephone: (609) 520-2300
Facsimile: (609) 520-2413
To the Board of Trustees of
Mosaic Income Trust:
In planning and performing our audit of the financial statements of the
Mosaic Income Trust (the "Trust") (including the High Yield, Government,
and Bond Funds) for the periods ended December 31, 1997, (on which we
have issued our report dated February 13, 1998), 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
the Trust's internal control.
The management of the Trust 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 of controls. 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.
Those controls include the safeguarding of assets against unauthorized
acquisition, use, or disposition.
Because of inherent limitations in any internal control, errors or fraud
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 the Trust's 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 one or more of the internal control
components does not reduce to a relatively low level the risk that
errors or fraud 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 Trust's
internal control and its operation, including controls 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, the Board of Trustees, and the Securities and Exchange
Commission.
(signature)
Deloitte & Touche LLP
Princeton, New Jersey
February 13, 1998
Attachment to Form NSAR
Mosaic Government Money Market
Mosaic Tax-Free Trust
Mosaic Income Trust
Mosaic Equity Trust
Exhibit 77K: Changes in registrant's certifying accountant
The Registrant's certifying accountant has changed from Ernst & Young
LLP (Former Accountant) to Deloitte & Touche LLP (Current Accountant).
The following information is provided in the order set forth in Reg
229.304. Item 304(a)(1) (Item 304):
1(a)(i). The Former Accountant resigned for economic reasons pursuant
to the mutual agreement of the Registrant and the Former Accountant
effective on the date the Current Accountant was approved to succeed the
Former Accountant, August 27, 1997.
1(a)(ii). The Former Accountant's report on the financial statements
for either of the past two years contained NO adverse opinion or
disclaimer of opinion, NOR was it qualified or modified as to
uncertainty, audit scope or accounting principles.
1(a)(iii). The replacement of the Former Accountant with the Current
Accountant was unanimously approved by the Registrant's full Board of
Trustees on August 27, 1997 at a special meeting called for such
purpose.
1(a)(iv). There have been NO disagreements with the Former Accountant
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure.
1(a)(v). The Former Accountant has NOT advised the Registrant as to any
matters set forth in paragraphs (A) through (D) of Item 304(a)(1)(v).
3. The Former Accountant has been provided a copy of these disclosures
prior to the date this Exhibit was filed as an attachment to Form NSAR.
By copy of these disclosures, the Registrant requests the Former
Accountant to furnish the Registrant with a letter address to the
Commission stating whether it agrees with the statements made by the
Registrant in response to this Item 304(a)(1) and, if not, stating the
respects in which it does not agree. The Former Accountant's letter is
intended to be filed as an exhibit to this Form NSAR. If the Former
Accountant's letter is unavailable at the time of filing, then the
Former Accountant is hereby requested to provide the letter as promptly
as possible so tht the Registrant can file the letter within 10 business
days after filing this Form NSAR.
<PAGE>
Ernst & Young LLP
2 Commerce Square
2001 Market Street
Philadelphia, PA 19103
215-448-5000
February 26, 1998
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Gentlemen:
We have read Exhibit 77K of Form N-SAR dated December 31, 1997 of
Mosaic Equity Trust and Mosaic Income Trust and
are in agreement with the statements contained in paragraphs 1(a)(i),
1(a)(ii), 1(a)(iv) and 1(a)(v) therein. We have no basis to agree
or disagree with other statements of the registrant contained therein.
Very truly yours,
(signature)
Ernst & Young LLP
Mosaic Income Trust
Exhibit 77Q.1 to Form NSAR December 31, 1997
Amendment to Services Agreement dated July 31, 1996
between Bankers Finance Advisors, LLC and Mosaic (formerly GIT) Income
Trust
Effective November 1, 1997, Section 4 of the Agreement shall be and
hereby is amended to read as follows:
"4. Compensation to BFA. BFA shall have no responsibility hereunder to
bear at its own expense any costs or expenses of the Trust. The Trust
shall pay to BFA a fee per annum for all services provided to the Trust
hereunder (including, by way of example and not limitation, transfer
agency and shareholder service, portfolio and shareholder accounting,
registration fees, audit and legal expenses). Such fee shall be
calculated daily, based on the ending daily net assets of the applicable
series of the Trust. Such fee shall be payable monthly as of the last
day of the month and shall be the sum of the daily fees calculated as
one-three hundred sixty-fifth (1/365), except in leap years one-hundred
sixty-sixth (1/366), of the annual fee. Such fee is set forth below
determined according to the level of net assets of the applicable series
of the Trust. This fee may not be raised without approval by the Trust.
BFA may lower this fee at any time, which lower fee must be ratified by
the Trust. Once lowered, BFA may not raise the fee without approval by
the Trust. Nothing herein prevents BFA from waiving any or all of this
fee at any time.
Series Fee in Basis Points
High Yield (formerly Maximum Income) Fund 53
Government Fund 52
Mosaic Bond Fund 60
Provided, however, that for the periods between June 13 , 1997 and
December 31, 1997, the combined Direct Expenses, Base Fee and Activity Fee
shall not exceed 75 for the Mosaic Bond Fund."
