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<PAGE> PAGE 2
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SIGNATURE EDWARD J. VEILLEUX
TITLE VICE PRESIDENT
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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REPORT OF INDEPENDENT ACCOUNTANTS
-------
To the Board of Directors of
Managed Municipal Fund, Inc.
In planning and performing our audit of the financial
statements and financial highlights of Managed Municipal Fund, Inc. for the year
ended October 31, 1997, we considered its internal control structure, including
procedures for safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the financial statements
and financial highlights and to comply with the requirements of Form N-SAR, not
to provide assurance on the internal control structure.
The management of Managed Municipal Fund, Inc. is responsible
for establishing and maintaining an internal control structure. In fulfilling
this responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of internal control structure
policies and procedures. Two of the objectives of an internal control structure
are to provide management with reasonable, but not absolute, assurance that
assets are safeguarded against loss from unauthorized use or disposition and
that transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not be detected. Also,
projection of any evaluation of the structure 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 the internal control structure would not
necessarily disclose all matters in the internal control structure 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 structure elements 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 and
financial highlights 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 the internal control structure, including
procedures for 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 Managed Municipal Fund, Inc. and for
the Securities and Exchange Commission.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
November 26, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
-------
To the Shareholders and Directors of
Managed Municipal Fund, Inc.:
We have audited the accompanying statement of net assets of Managed
Municipal Fund, Inc. as of October 31, 1997, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years then ended and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
October 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Managed Municipal Fund, Inc. as of October 31, 1997, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended and its financial highlights for each
of the five years in the period then ended, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
November 26, 1997