EX-99.B-77B
WADDELL & REED ADVISORS MUNICIPAL HIGH INCOME FUND, INC.
SUB-ITEM 77B: Accountant's report on internal control
INDEPENDENT AUDITORS' REPORT
To the Directors of Waddell & Reed Advisors Municipal High Income Fund, Inc.:
In planning and performing our audit of the financial statements of Waddell &
Reed Advisors Municipal High Income Fund, Inc. (formerly United Municipal High
Income Fund, Inc.) (the "Fund") for the year ended September 30, 2000 (on which
we have issued our report dated November 3, 2000), we considered its internal
control, 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, and
not to provide assurance on the Fund's internal control.
The management of the 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 accounting principles generally accepted
in the United States of America. Those controls include the safeguarding of
assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in any internal control, misstatements due to
error or fraud may occur and not be detected. Also, projections of any
evaluation of internal control to future periods are subject to the risk that
internal control may become inadequate because of changes in conditions, or that
the degree of compliance with policies or procedures may deteriorate.
Our consideration of the Fund's 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 of the 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 the
Fund's internal control and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above as of
September 30, 2000.
This report is intended solely for the information and use of management, the
Board of Directors of Waddell & Reed Advisors Municipal High Income 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
November 3, 2000
