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SIGNATURE RUTH PROCHASKA
TITLE CONTROLLER
INDEPENDENT AUDITORS' REPORT
ON INTERNAL ACCOUNTING CONTROL
The Board of Directors
Municipal Assets Fund:
In planning and performing our audit of the financial statements of Municipal
Assets Fund for the year ended June 30, 1997, we considered its internal
control, 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 internal control.
The management of Municipal Assets Fund 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 internal control policies and procedures. Two of the objectives of
internal control 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 control, errors or irregularities
may occur and not be detected. Also, projection of any evaluation of the
internal control to future periods is subject to the risk that procedures 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 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 internal control, including
procedures for safeguarding securities, that we considered to be material
weaknesses as defined above.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
KPMG Peat Marwick LLP
July 25, 1997
