REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of
FEDERATED U.S. GOVERNMENT BOND FUND:
In planning and performing our audit of the financial statements of
Federated U.S. Government Bond Fund (a Massachusetts business trust)
for the year ended August 31, 1999, we considered its internal control
structure, 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 internal
control.
The management of Federated U.S. Government Bond 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 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 control activities include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in 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 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 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 internal control and
its operation, including controls for safeguarding securities, that we
consider to be material weaknesses as defined above as of August 31,
1999.
This report is intended solely for the information and use of
management, the Shareholders and Board of Trustees of Federated U.S.
Government Bond Fund, and the Securities and Exchange Commission.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 26, 1999
