The Rushmore Fund, Inc.
4922 Fairmont Avenue
Bethesda, Maryland 20814
To the Board of Directors of The Rushmore Fund, Inc.:
We are the auditors of The Rushmore Fund, Inc. (the Fund), a series
investment company comprised of one portfolio, the U.S. Government
Bond Portfolio (the Portfolio). Rushmore Trust and Savings, FSB
(Rushmore Trust), a related entity, is custodian of the Fund's portfolio
and the Fund is therefore subject to the provisions of Rule 17f-2 under
the Investment Company Act of 1940. Accordingly, we have accounted
for the Portfolio's investment securities held by Rushmore Trust as of
the close of business on August 31, 1998. It is understood that this
report is solely for the use of management and for the information of
the Securities and Exchange Commission and should not be used for
any other purpose.
Rushmore Trust, in addition to acting as custodian for the Portfolio,
is custodian for other customers. Agents of Rushmore Trust hold, or
account for by book entry, securities that are the responsibility of
Rushmore Trust through custodial or trust agreements. Securities held
by agents of Rushmore Trust, while identified by such agents as being
deposited by Rushmore Trust, cannot be identified by such agents as to
the specific customers of Rushmore Trust whom have securities
included in such deposits.
Rushmore Trust confirmed to us that the portfolio securities owned
by the Fund on August 31, 1998 were held for the account of
Rushmore Trust by the Federal Reserve Book Entry System (the Fed), as
agent for Rushmore Trust. We obtained confirmation from the Fed of
the securities held for the account of Rushmore Trust as of August 31,
1998. We reviewed Rushmore Trust's reconciliation of the Fed's
confirmation to Rushmore Trust's internal records, identifying securities
held by the Fed as a part of Rushmore Trust's aggregate security
position with the Fed. We also reviewed Rushmore Trust's records that
show the owners of the securities held by the Fed for the account of the
Rushmore Trust at August 31, 1998. We determined that these securities,
identified by such records as the property of the Fund's Portfolio, were in
agreement with the Fund's records of securities owned at August 31, 1998.
In addition, a broker confirmed to us the repurchase agreement
outstanding at August 31, 1998, which was in agreement with the Fund's
records. We also agreed an analysis of portfolio transactions recorded
subsequent to June 29, 1998, the date of our most recent examination of
the Fund's securities required under Rule 17f-2, in the investment
accounts to supporting records and verified a sample of portfolio security
transactions to supporting records and documentation.
Because the above procedures were not sufficient to constitute an audit
made in accordance with generally accepted auditing standards, we do
not express an opinion on the investment accounts referred to above as
of the dates indicated. In connection with the procedures referred to above,
no matters came to our attention that caused us to believe that the specified
accounts should be adjusted. Had we performed additional procedures or
had we made an audit of the financial statements of the Fund in
accordance with generally accepted auditing standards, matters might have
come to our attention that would have been reported to you. This report
relates only to the investments specified above and does not extend to
the financial statements of the Fund, taken as a whole for any date or period.
Deloitte & Touche LLP
Princeton, New Jersey
September 25, 1998
