Report of Independent Accountants
To the Shareholders and Board of Trustees of
Vanguard Malvern Funds
In planning and performing our audit of the financial
statements of Vanguard Malvern Funds (the "Funds") for
the year ended September 30, 2000 we considered its internal
controls, 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 controls may become inadequate because of changes
in conditions or that the effectiveness of their 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 the internal control components does not reduce to a
relatively low level the risk that misstatements caused by error
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 September 30, 2000.
This report is intended solely for the information and
use of the Board of Trustees, management and the
Securities and Exchange Commission and is not intended
to be and should not be used by anyone other than these
specified parties.
PRICEWATERHOUSECOOPERS LLP
November 1, 2000
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