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SECURITIES AND EXCHANGE COMMISSION --------------------------
WASHINGTON, D.C. 20549 OMB Approval
FORM N-17f-2 --------------------------
OMB Number: 3235-0360
Certificate of Accounting of Securities and Similar Expires: July 31, 1994
Investment in the Custody of Estimated average burden
Management Investment Companies hours per response... 0.05
Pursuant to Rule 17f-2 [17 CFR 270.17f-2]
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1. Investment Company Act File Number: Date examination completed
811-4852 May 7, 1999
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2. State identification Number: N/A
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AL AK AZ AR CA CO
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CT DE DC FL GA HI
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ID IL IN IA KS KY
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LA ME MD MA MI MN
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MS MO MT NE NV NH
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NJ NM NY NC ND OH
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OK OR PA RI SC SD
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TN TX UT VT VA WA
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WV WI WY PUERTO RICO
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Other (specify):
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3. Exact name of investment company as specified in representation statement:
The Victory Portfolios
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4. Address of principal executive office (number, street, city, state, zip code):
3435 Stelzer Road, Columbus, Ohio 43219
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PRICEWATERHOUSECOOPERS LOGO
PricewaterhouseCoopers LLP
100 East Broad Street
Suite 2100
Columbus OH 43215-3671
Telephone (614) 225 8700
Facsimile (614) 224 1044
INDEPENDENT ACCOUNTANTS' REPORT
To the Trustees of The Victory Portfolios
We have examined management's assertion about The Victory Portfolios'
(comprising the Institutional Money Market Fund, the Federal Money Market Fund,
the U.S. Government Obligations Fund, the Prime Obligations Fund, the Financial
Reserves Fund, the Tax-Free Money Market Fund, the Ohio Municipal Money Market
Fund, the Limited Term Income Fund, the Intermediate Income Fund, the Fund for
Income, the Government Mortgage Fund, the Investment Quality Bond Fund, the
National Municipal Bond Fund, the New York Tax-Free Fund, the Ohio Municipal
Bond Fund, the Balanced Fund, the Convertible Securities Fund, the Real Estate
Investment Fund, the Value Fund, the Lakefront Fund, the Diversified Stock Fund,
the Stock Index Fund, the Growth Fund, the Established Value Fund, the Special
Value Fund, the Gradison Government Reserves Fund, the Ohio Regional Stock Fund,
the Small Company Opportunity Fund, the International Growth Fund, the
LifeChoice Growth Investor Fund, the LifeChoice Moderate Investor Fund, and the
LifeChoice Conservative Investor Fund) compliance with the requirements of
subsections (b) and (c) of Rule 17f-2 under the Investment Company Act of 1940
as of May 7, 1999, included in the accompanying Management Statement Regarding
Compliance with Certain Provisions of the Investment Company Act of 1940.
Management is responsible for The Victory Portfolios' compliance with those
requirements. Our responsibility is to express an opinion on management's
assertion about The Victory Portfolios' 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 Victory Portfolios' 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 May 7, 1999, with respect to securities of The Victory
Portfolios:
- Count and inspection of all securities located in the vault of
Key Trust Company of Ohio, N.A. in Cleveland, Ohio without prior
notice to management;
- Confirmation, or other procedures as we considered necessary, of
all securities held in book entry form by the Federal Reserve
Bank of Cleveland, Depository Trust Company, Bank of New York or
Morgan Stanley Trust Company;
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[PRICEWATERHOUSECOOPERS Logo]
- Confirmation, or other procedures as we considered necessary, of
all securities out for transfer with brokers;
- Confirmation, or other procedures as we considered necessary, of
all repurchase agreements with brokers/banks and agreement of
underlying collateral with Key Trust Company of Ohio, N.A.'s
records;
- Confirmation, or other procedures as we considered necessary, of
all mutual fund investments with transfer agents; and
- Reconciliation of all such securities to the books and records of
The Victory Portfolios and Key Trust Company of Ohio, N.A.
We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on The Victory Portfolios'
compliance with specified requirements.
In our opinion, management's assertion that The Victory Portfolios was in
compliance with the requirements of subsections (b) and (c) of Rule 17f-2 of the
Investment Company Act of 1940 as of May 7, 1999, with respect to securities
reflected in the investment accounts of The Victory Portfolios is fairly stated,
in all material respects.
This report is intended solely for the information and use of management of The
Victory Portfolios and the Securities and Exchange Commission and should not be
used for any other purpose.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
July 14, 1999
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MANAGEMENT STATEMENT REGARDING COMPLIANCE WITH CERTAIN PROVISIONS
OF THE INVESTMENT COMPANY ACT OF 1940
We, as members of management of The Victory Portfolios (comprising the
Institutional Money Market Fund, the Federal Money Market Fund, the U.S.
Government Obligations Fund, the Prime Obligations Fund, the Financial Reserves
Fund, the Tax-Free Money Market Fund, the Ohio Municipal Money Market Fund, the
Limited Term Income Fund, the Intermediate Income Fund, the Fund for Income, the
Government Mortgage Fund, the Investment Quality Bond Fund, the National
Municipal Bond Fund, the New York Tax-Free Fund, the Ohio Municipal Bond Fund,
the Balanced Fund, the Convertible Securities Fund, the Real Estate Investment
Fund, the Value Fund, the Lakefront Fund, the Diversified Stock Fund, the Stock
Index Fund, the Growth Fund, the Established Value Fund, the Special Value Fund,
the Gradison Government Reserves Fund, the Ohio Regional Stock Fund, the Small
Company Opportunity Fund, the International Growth Fund, the LifeChoice Growth
Investor Fund, the LifeChoice Moderate Investor Fund, and the LifeChoice
Conservative investor 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
Victory Portfolios' compliance with the requirements of subsections (b) and (c)
of Rule 17f-2 as of May 7, 1999 on this evaluation, we assert that The Victory
Portfolios was in compliance with the provisions of subsections (b) and (c) of
Rule 17f-2 of the Investment Company Act of 1940 as of May 7, 1999, with respect
to securities reflected in the investment accounts of The Victory Portfolios.
The Victory Portfolios
