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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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SIGNATURE TIMOTHY N. COAKLEY
TITLE VICE PRESIDENT
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors
of The Rushmore Fund, Inc.:
We have audited the accompanying statement of net assets of the U.S.
Government Bond Portfolio of The Rushmore Fund, Inc., as of
August 31, 1998, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each
of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free from material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and financial highlights. Our
procedures included confirmation of securities owned at August 31, 1998,
by correspondence with the custodian and broker. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
U.S. Government Bond Portfolio of The Rushmore Fund, Inc., as of August
31, 1998, the results of its operations, the changes in its net assets, and
the financial highlights for the above stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
September 25, 1998
