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TITLE VICE PRES & SEC'Y
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Report of Independent Auditors on Internal Control
The Board of Directors and Shareholders
Princor High Yield Fund, Inc.
In planning and performing our audit of the financial statements of Princor High
Yield Fund, Inc. for the year ended October 31, 1997, we considered its internal
control, including control activities 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 control.
The management of Princor High Yield Fund, Inc. is responsible for establishing
and maintaining internal control. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs. 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. These controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or irregularities
may occur and not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control 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 specific
internal control components does not reduce to a relatively low level the risk
that errors or irregularities 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 control, including
control for activities safeguarding securities, that we consider to be material
weaknesses as defined above as of October 31, 1997.
This report is intended solely for the information and use of management and the
Board of Directors of Princor High Yield Fund, Inc. and the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
Des Moines, Iowa
November 26, 1997
SPECIAL MEETING OF SHAREHOLDERS PRINCOR HIGH YIELD FUND, INC.
HELD SEPTEMBER 16, 1997
1.Election of the Board of Directors.
For Withheld
Davis 3,252,836 28,034
Ehrle 3,251,629 29,241
Ferguson 3,253,098 27,771
Gilbert 3,247,268 33,601
Griswell 3,253,146 27,724
Jones 3,253,184 27,686
Keller 3,252,061 28,809
Lukavsky 3,248,678 32,192
Peebler 3,240,116 40,754
2.Ratification of selection of Ernst & Young LLP as independent public auditors.
In Favor Opposed Abstain
3,251,638 4,997 24,235
3.Approval of name change to Principal High Yield Fund, Inc.
In Favor Opposed Abstain
3,192,377 52,120 36,373
4.Approval of modification of management agreement.
In Favor Opposed Abstain
3,101,832 126,026 53,011
