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 two portfolios, the U.S. Government
Bond and Nova Portfolio (the Portfolios). Rushmore Trust and Savings,
FSB (Rushmore Trust), a related entity, is custodian of the Fund's
portfolios and the Fund is therefore subject to the provisions of Rule 17f-2
under the Investment Company Act of 1940. Accordingly, we have, without
prior notice to the Fund or to Rushmore Trust, accounted for the Fund's
investment securities held by Rushmore Trust as of the close of business on
December 19, 1997. 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 Portfolios, is
custodian for other customers. Agents of Rushmore Trust hold, or account for
by book entry, securities which are the responsibility of Rushmore Trust
through custodian 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 who have securities included in such deposits.
Rushmore Trust confirmed to us that the portfolio securities owned by the
Fund on December 19, 1997 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 December 19, 1997. 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 records which
show the owners of the securities held by the Fed for the account of Rushmore
Trust at December 19, 1997. We determined that securities, identified by such
records as the property of the Fund's Porfolios, were in agreement with the
Fund's records of securities owned at December 19, 1997. In addition, a
broker confirmed to us the repurchase agreement outstanding at December 19,
1997, which was in agreement with the Fund's records. We also agreed an
analysis of portfolio transactions recorded subsequent to August 31, 1997,
the date of the last audit of the financial statements, 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
January 21, 1998
