To the Audit Committee of the Board of Directors of
The Rushmore Fund, Inc.:
We have examined management's assertion about The
Rushmore Fund, Inc. (the Fund's) compliance with the
requirements of subsections (b) and (c) of Rule 17f-2
under the Investment Company Act of 1940 (the Act) as
of January 13, 1999, included in the accompanying
Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of
1940. Management is responsible for the Fund's
compliance with those requirements. Our responsibility
is to express an opinion on management's assertion about
the Fund's compliance based on our examination.
Our examination was made in accordance with standards
established by the American Institute of Certified Public
Accountants and, accordingly, included examining, on a
test basis, evidence about the Fund's compliance with
those requirements and performing such other procedures
as we considered necessary in the circumstances. Included
among our procedures were the following tests performed as
of January 13, 1999, and with respect to agreement of
security purchases and sales, for the period from August
31, 1998, the date of our last audit, through January 13,
1999:
* Confirmation of all securities held by Rushmore Trust in
book entry form for the account of the Fund;
* Confirmation from Rushmore Trust that the securities
held for the account of the Fund were held for the account
of Rushmore Trust by the Federal Reserve Book Entry System
(the Fed), as agent for Rushmore Trust;
* Confirmation with the Fed of all securities held by the
Fed in book entry form for the account of Rushmore Trust;
* Confirmation with brokers that all purchases and sales
outstanding were in agreement with the Fund's records;
* Reconciliation of all such securities to the books and
records of the Rushmore Trust and the Fund;
* Confirmation of all repurchase agreements with brokers/
banks and agreement of underlying collateral with broker's
records;
* Agreement of selected security purchases, sales and
maturities since our last report from the books and
records of the Fund to broker confirmations.
We believe that our examination provides a reasonable
basis for our opinion. Our examination does not
provide a legal determination on the Fund's compliance
with specified requirements.
In our opinion, management's assertion that The Rushmore
Fund, Inc. was in compliance with the requirements of
subsections (b) and (c) of Rule 17f-2 of the Investment
Company Act of 1940 as of January 13, 1999 with respect
to securities reflected in the investment account of the
Fund is fairly stated, in all material respects.
This report is intended solely for the information and
use of management of The Rushmore 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.
Deloitte & Touche LLP
Princeton, New Jersey
April 21, 1999
Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
We, as members of management of The Rushmore Fund, Inc.
(the Fund), are responsible for complying with the
requirements of subsections (b) and (c) of Rule 17f-2,
"Custody of Investments by Registered Management
Investment Companies," of the Investment Company Act
of 1940. We are also responsible for establishing and
maintaining effective internal controls over compliance
with those requirements. We have performed an
evaluation of the Fund's compliance with the
requirements of subsections (b) and (c) of Rule 17f-2
as of January 13, 1999 and from August 21, 1998 (last
examination date) through January 13, 1999.
Based on this evaluation, we assert that the Fund
was in compliance with the requirements of
subsections (b) and (c) of Rule 17f-2 of the
Investment Company Act of 1940 as of January 13,
1999 and from August 31, 1998 (the date of our last
audit) through January 13, 1999, with respect to
securities reflected in the investment accounts of
The Rushmore Fund, Inc.
Daniel L. O'Connor
Chairman of the Board
Richard J. Garvey
President
Timothy N. Coakley
Treasurer
