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SIGNATURE FRED R. KELLY, JR.
TITLE PORTFOLIO MANAGER
EXHIBIT 99
ATTACHMENT 77G
For the period ending: 09/30/99
File number: 811-05009
DEFAULTS & ARREARS ON SENIOR SECURITIES
<TABLE>
<S> <C>
1) Briargate Public Building Authority, Landowner Assessment Lien Series 1985A
and 1986A
In default: Interest
Nature of Default: (partial default) District did not make timely interest payment.
Date of Default: December 15, 1990
Default per $1,000 face: $ 310,543
2) Town of Castle Rock, Local Improvement District 1988-2
In default: Interest
Nature of Default: (partial default) District did not make timely interest
payment.
Date of Default: December 1, 1993 (50% interest payment)
June 1, 1994 no interest payment
Default per $1,000 face: $ 530,000
3) El Paso County, Colorado Pheasant Run LID 86-2 Local Improvement District
In default: Interest
Nature of Default: District did not make timely interest payment.
Date of Default: March, 1994
Default per $1,000 face: $ 90,588
4) Mesa County Single Family Mortgage Revenue Series 1982
In default: Interest
Nature of Default: District did not make timely interest payment.
Date of Default: December 1, 1995
Default per $1,000 face: $ 220,000
5) Northgate Public Building Authority Landowner Assessment Lien Series 1987A
In default: Interest
Nature of Default: District did not make timely interest payment.
Date of Default: July 1, 1991
Default per $1,000 face: $ 20,000
6) The City of Fort Collins, Colorado Industrial Development Revenue Bonds
In default: Interest
Nature of Default: District did not make timely interest payment.
Date of Default: December 1, 1998
Default per $1,000 face: $ 2,900,000
</TABLE>
EXHIBIT 99
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
COLORADO BOND SHARES - A TAX-EXEMPT FUND:
In planning and performing our audit of the financial statements of Colorado
Bond Shares - A Tax-Exempt Fund for the year ended September 30, 1999, we
considered its internal controls, including procedures 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, not to provide assurance on the internal controls.
The management of Colorado Bond Shares - A Tax-Exempt Fund is responsible for
establishing and maintaining internal controls. 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 generally accepted accounting principles. Those controls
include the safeguarding of assets against unauthorized acquisition, use or
disposition.
Because of inherent limitations in internal controls, errors may occur and may
not be detected. Also, projection of any evaluation of internal controls to
future periods is subject to the risk that they may become inadequate because
of changes in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of internal controls would not necessarily disclose all
matters in internal controls 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 the
specific internal control elements does not reduce to a relatively low level
the risk that errors 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 internal controls, including
procedures for safeguarding securities, that we considered to be material
weaknesses as defined above as of September 30, 1999.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission and should not be used for any other purpose.
/s/ FORTNER, BAYNES, LEVKULICH AND CO., P.C.
Denver, Colorado
November 11, 1999
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<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> SEP-30-1999
<INVESTMENTS-AT-COST> 79,527,700
<INVESTMENTS-AT-VALUE> 78,661,879
<RECEIVABLES> 1,632,703
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