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<PAGE> PAGE 2
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014 A000004 SCUDDER INVESTORS SERVICES, INC.
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014 A000005 ZURICH CAPITAL MARKETS
014 B000005 8-49827
014 A000006 BANK HANDLOWY
014 B000006 8-24613
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<PAGE> PAGE 3
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022 A000001 LEHMAN BROTHERS INC.
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022 C000001 240208
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022 C000010 2782
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SIGNATURE PHILIP J. COLLORA
TITLE V.P. AND SECRETARY
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1998 ANNUAL REPORT TO SHAREHOLDERS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000814955
<NAME> KEMPER ADJUSTABLE RATE U.S. GOVERNMENT FUND
<SERIES>
<NUMBER> 001
<NAME> CLASS A
<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> AUG-31-1998
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<INVESTMENTS-AT-VALUE> 67,109
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<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,646
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<EXPENSES-NET> (1,082)
<NET-INVESTMENT-INCOME> 3,564
<REALIZED-GAINS-CURRENT> (218)
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1998 ANNUAL REPORT TO SHAREHOLDERS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000814955
<NAME> KEMPER ADJUSTABLE RATE U.S. GOVERNMENT FUND
<SERIES>
<NUMBER> 002
<NAME> CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
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<DISTRIBUTIONS-OF-GAINS> 0
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<ACCUMULATED-GAINS-PRIOR> (10,640)
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1998 ANNUAL REPORT TO SHAREHOLDERS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000814955
<NAME> KEMPER ADJUSTABLE RATE U.S. GOVERNMENT FUND
<SERIES>
<NUMBER> 003
<NAME> CLASS C
<MULTIPLIER> 1,000
<S> <C>
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<PERIOD-START> SEP-01-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 67,451
<INVESTMENTS-AT-VALUE> 67,109
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<SENIOR-EQUITY> 0
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<SHARES-COMMON-STOCK> 163
<SHARES-COMMON-PRIOR> 127
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<OTHER-INCOME> 0
<EXPENSES-NET> (1,082)
<NET-INVESTMENT-INCOME> 3,564
<REALIZED-GAINS-CURRENT> (218)
<APPREC-INCREASE-CURRENT> (589)
<NET-CHANGE-FROM-OPS> 2,757
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (58)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
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<NUMBER-OF-SHARES-REDEEMED> (143)
<SHARES-REINVESTED> 7
<NET-CHANGE-IN-ASSETS> (12,660)
<ACCUMULATED-NII-PRIOR> 657
<ACCUMULATED-GAINS-PRIOR> (10,640)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 415
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,082
<AVERAGE-NET-ASSETS> 75,428
<PER-SHARE-NAV-BEGIN> 8.33
<PER-SHARE-NII> .36
<PER-SHARE-GAIN-APPREC> (.11)
<PER-SHARE-DIVIDEND> (.36)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.22
<EXPENSE-RATIO> 1.95
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</TABLE>
REPORT OF INDEPENDENT AUDITORS
Board of Trustees
Kemper Funds
In planning and performing our audit of the financial statements of
each of the Kemper Funds listed in Exhibit A attached hereto (the
"Funds") for the period ended as of the date listed in Exhibit A
attached hereto ("Report Date"), we considered their 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 the Funds 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 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 control, errors or fraud
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 one or more of specific internal control
components does not reduce to a relatively low level the risk that
errors or fraud 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 and its operation, including controls for
safeguarding securities, that we consider to be material weaknesses
as defined above as of Report Date.
This report is intended solely for the information and use of the
board of trustees and management and the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Chicago, Illinois
October 16, 1998
Kemper Funds
Exhibit A
August 31, 1998
Kemper State Tax-Free Income Series -
Kemper California Tax-Free Income Fund
Kemper New York Tax-Free Income Fund
Kemper Florida Tax-Free Income Fund
Kemper Texas Tax-Free Income Fund
Kemper Ohio Tax-Free Income Fund
Kemper Michigan Tax-Free Income Fund
Kemper New Jersey Tax-Free Income Fund
Kemper Pennsylvania Tax-Free Income Fund
Kemper Adjustable Rate US Government Fund
