ITEM 77B
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Trustees and Shareholders
Freedom Funds Management Company, Inc.
We have examined management's assertion, include in its
representation letter dated November 3, 2000, that Freedom Funds Management
Company, Inc. (the Company) "maintained effective internal controls, including
the appropriate segregation of responsibilities and duties, over the transfer
agent and registrar functions, as of September 30, 2000 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 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 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.
In our opinion, management's assertion that, as of September 30,
2000, 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.
/s/ Fortner, Bayens, Levkulich and Co., P.C.
Denver, Colorado
November 3, 2000
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ITEM 77B
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
Colorado BondShares - A Tax-Exempt Fund
In planning and performing our audit of the financial statements of
Colorado BondShares - A Tax-Exempt Fund for the year ended September 30, 2000,
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 internal controls.
The management of Colorado BondShares - A Tax-Exempt Fund is
responsible for establishing and maintaining internal controls. In fulfilling
this responsibility, estimates and judgements by management are required to
assess the expected benefits and related costs of internal control policies and
procedures. 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, 2000.
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, BAYENS, LEVKULICH & CO., P.C.
Denver, Colorado
November 3, 2000
