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SIGNATURE ERIC JONES
TITLE DIRECTOR
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<CIK> 0000715974
<NAME> LINCOLN NATIONAL MANAGED FUND INC.
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</TABLE>
Report of Independent Auditors on Internal Control
Board of Directors
Lincoln National Aggressive Growth Fund, Inc. Lincoln National Managed
Fund, Inc. Lincoln National Bond Fund, Inc. Lincoln National Money Market
Fund, Inc. Lincoln National Capital Appreciation Fund, Inc. Lincoln
National Global Asset Allocation Fund, Inc. Lincoln National Equity Income
Fund, Inc. Lincoln National Social Awareness Fund, Inc. Lincoln National
Growth and Income Fund, Inc. Lincoln National Special Opportunities Fund,
Inc. Lincoln National International Fund, Inc.
In planning and performing our audits of the financial statements of Lincoln
National Aggressive Growth Fund, Inc., Lincoln National Bond Fund, Inc.,
Lincoln National Capital Appreciation Fund, Inc., Lincoln National Equity
Income Fund, Inc., Lincoln National Growth and Income Fund, Inc., Lincoln
National International Fund, Inc., Lincoln National Managed Fund, Inc., Lincoln
National Money Market Fund, Inc., Lincoln National Global Asset Allocation Fund,
Inc., Lincoln National Social Awareness Fund, Inc. and Lincoln National Special
Opportunities Fund, Inc. (the "Funds") for the year ended December 31, 1996,
we considered the internal control structure of the Funds, including
procedures for safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinions on the financial
statements and to comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of the Funds is responsible for establishing and maintaining an
internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and
related costs of internal control structure policies and procedures. Two of
the objectives of an internal control structure 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 any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure 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.
<PAGE>
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure 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 structure 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 control structure,
including procedures for safeguarding securities, that we consider to be
material weaknesses as defined above as of December 31, 1996.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
/s/ Ernst & Young
January 27, 1997
