Independent Auditors' Report
on Internal Accounting Control
The Board of Directors and Shareholders
AXP Variable Portfolio - Managed Series, Inc.:
In planning and performing our audits of the financial statements of AXP VP -
Diversified Equity Fund and AXP VP - Managed Fund (funds within AXP Variable
Portfolio - Managed Series, Inc.) for the period from September 15, 1999 (date
the fund became available) to August 31, 2000 and for the year ended August
31, 2000, respectively, we considered their 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 Variable Portfolio - Managed Series, 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 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 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 Variable Portfolio - Managed 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
October 6, 2000
