Independent Auditors' Report on Internal Accounting Control
The Board of Directors and Shareholders
AXP Extra Income Fund, Inc.:
In planning and performing our audit of the financial statements of
AXP Extra Income Fund, Inc. for the year ended May 31, 2000, 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 internal control.
The management of AXP Extra Income 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 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 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 the internal control would not necessarily disclose all
matters in the 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 misstatements caused by error 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 internal control and its
operation, including controls for safeguarding securities, that we consider
to be a material weakness as defined above.
This report is intended solely for the information and use of management,
the Board of Directors of AXP Extra Income Fund, Inc., and the Securities
and Exchange Commission and is not intended to be and should not be used by
anyone other than these specified parties.
KPMG LLP
Minneapolis, Minnesota
July 7, 2000
