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SIGNATURE JAMES COLANTINO
TITLE SENIOR ADMINISTRATOR
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<NAME> THE CHACONIA INCOME & GROWTH FUND, INC.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of Chaconia Income & Growth Fund:
In planning and performing our audit of the
financial statements and financial highlights of
Chaconia Income & Growth Fund (the Fund) for the
year ended December 31, 1998, we considered its
internal control, including control activities for
safeguarding securities, in order to determine our
auditing procedures for the purposes 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 internal control.
The management of the Fund is responsible for
establishing and maintaining internal control. In
fulfilling this responsibility, estimates and
judgements 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, error 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 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 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 internal control and its
operation, including controls for safeguarding
securities, that we consider to be material
weaknesses as defined above as of December 31,
1998.
This report is intended solely for the information
and use of management, the Board of Directors of
Chaconia Income & Growth Fund, and the Securities
and Exchange Commission.
PricewaterhouseCoopers
New York, New York
February 24, 1999
