U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM N-17F-2
Certificate of Accounting of Securities and Similar
Investments in the Custody of
Management Investment Companies
Pursuant to Rule 17f-2 (17 CFR 270.17f-2)
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1. Investment Company Act File Number: Date examination completed:
811-5086 December 31, 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 registration statement:
Churchill Tax-Free Trust
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4. Address of principal executive office (number, street, city, state, zip
code):
380 Madison Avenue, Suite 2300, New York, NY 10017
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INSTRUCTIONS
This Form must be completed by investment companies that have custody of
securities or similar investments.
Investment Company
1. All items must be completed by the investment company.
2. Give this Form to the independent public accountant who, in compliance
with Rule 17f-2 under the Act and applicable state law, examines
securities and similar investments in the custody of the investment
company.
Accountant
3. Submit this Form to the Securities and Exchange Commission and
appropriate state securities administrators when filing the certificate
of accounting required by Rule 17f-2 under the Act and applicable state
law. File the original and one copy with the Securities and Exchange
Commission's principal office in Washington, D.C., one copy with the
regional office for the region in which the investment company's
principal business operations are conducted, and one copy with the
appropriate state administrator(s), if applicable.
THIS FORM MUST BE GIVEN TO YOUR INDEPENDENT PUBLIC ACCOUNTANT
Note: The estimated average burden hours are made solely for purposes of the
Paperwork Reduction Act, and are not derived from a comprehensive or even
a representative survey or study of the costs of SEC rules and forms.
Direct any comments concerning the accuracy of the estimated average
burden hours for compliance with SEC rules and forms to Kenneth A.
Fogash, Deputy Executive Director, U.S. Securities and Exchange
Commission, 450 Fifth St., N.W., Washington, D.C. 20549 and Gary
Waxman, Clearance Officer, Office of Management and Budget, Room 3208,
New Executive Office Building, Washington, D.C. 20503.
<PAGE>
Independent Auditors' Report
To the Board of Trustees of Churchill Tax-Free Fund of Kentucky:
We have examined management's assertion about Churchill Tax-Free Fund of
Kentucky (the "Fund") compliance with the requirements of subsections (b) and
(c) of Rule 17f-2 under the Investment Company Act of 1940 (the "Act") as of
December 31, 1999,included in the accompanying Management Statement regarding
Compliance with Certain Provisions of the Investment Company Act of 1940.
Management is responsible for the Fund's compliance with those requirements.
Our responsibility is to express an opinion on management's assertion about the
Fund's 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 Fund's 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 December 31, 1999, and the period from September 30, 1999
(the date of our last examination) through December 31, 1999,, with respect
to securities transactions, without prior notice to management:
* We agreed all securities reported by the Fund's accounting records to Banc
One Investment Management & Trust Group (the "Custodian") records as of
December 31, 1999;
* We verified the subsequent settlement on Custodian records of trades shown as
pending as of December 31, 1999, on the Fund's accounting records;
* We reviewed Bank One's Investment Management & Trust Group Report of
Policies and Procedures Placed in Operation and Test of Operating
Effectiveness for the Trust Application System ("SAS 70 Report") for the period
January 1, 1999 to September 30, 1999, and noted that no negative findings
were reported on Asset Custody and Control and Trust Accounting
System;
* We obtained representation from the Custodian that all control policies and
procedures detailed in Section III of Custodian's SAS 70 Report, have remained
in operation and functioned adequately from October 1, 1999 through December
31, 1999.
We believe that our examination provides a reasonable basis for our opinion.
Our examination does not provide a legal determination of the Fund's
compliance with specified requirements.
In our opinion, management's assertion that Churchill Tax-Free Fund of
Kentucky was in compliance with the provisions of subsections (b) and (c) of
Rule 17f-2 of the Investment Company Act of 1940 as of December 31, 1999,
with respect to securities reflected in the investment account of the Fund is
fairly stated, in all material respects.
This report is intended solely for the information and use of management of
Churchill Tax-Free Fund of Kentucky and the Securities and Exchange
Commission and should not be used by anyone other than these specified parties.
/s/ KPMG LLP
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March 6, 2000
