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<PAGE> PAGE 2
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SIGNATURE FRED R. KELLY, JR.
TITLE PORTFOLIO MANAGER
INDEPENDENT ACCOUNTANTS' REPORT
THE BOARD OF TRUSTEES
FREEDOM FUNDS MANAGEMENT COMPANY, INC.:
We have examined management's assertion, included in its representation letter
dated September 30, 1998 that Freedom Funds Management Company, Inc. (the
Company) maintained an effective internal controls, including the
appropriate segregation of responsibilities and duties, over the transfer agent
and registrar functions, as of September 30, 1998 and that no material
inadequacies as defined by Rule 17Ad-13(a)(3) of the Securities Exchange Act of
1934 existed at such date. The following management investment company
registered under the Investment Company Act of 1940 is served by the transfer
agent operations covered by our review: Colorado BondShares - A Tax-Exempt Fund.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included a
study and evaluation of the internal controls over the transfer agent
and registrar functions, using the objectives set forth in Rule 17Ad-13(a)(3) of
the Securities Exchange Act of 1934. Those objectives are to provide reasonable,
but not absolute, assurance that securities and funds are safeguarded against
loss from unauthorized use or disposition and that transfer agent activities are
performed promptly and accurately. We believe that our examination provides a
reasonable basis for our opinion.
Because of inherent limitations in internal controls, errors or
irregularities may occur and not be detected. Also, projections of any
evaluation of the internal controls over the transfer agent and
registrar functions to future periods are subject to the risk that the internal
controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, management's assertion that, as of September 30, 1998, the
Company maintained effective internal controls, including the
appropriate segregation of responsibilities and duties over the transfer agent
and registrar functions, and that no material inadequacies existed as defined by
Rule 17Ad-13(a)(3) of the Securities Act of 1934, is fairly stated, in all
material respects, based on the criteria established by Rule 17Ad-13(a)(3) of
the Securities Exchange Act of 1934.
This report is intended solely for the information and use of the board of
trustees and management of the Company and the Securities and Exchange
Commission and should not be used for any other purpose.
KPMG PEAT MARWICK LLP
Denver, Colorado
November 3, 1998
