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TITLE CHAIRMAN
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<REALIZED-GAINS-CURRENT> (56450)
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<DISTRIBUTIONS-OF-INCOME> 949207
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<SHARES-REINVESTED> 793884
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<ACCUMULATED-NII-PRIOR> 9368
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<PER-SHARE-NAV-BEGIN> 9.77
<PER-SHARE-NII> .49
<PER-SHARE-GAIN-APPREC> (.13)
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<PER-SHARE-DISTRIBUTIONS> .00
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</TABLE>
August 19, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
We were previously principal accountants for Stratus Fund, Inc. and, under
date of July 21, 1995, we reported on the financial statements of Stratus Fund,
Inc. (comprised respectively, of the Growth, Government Securities, Capital
Appreciation and Intermediate Government Bond Portfolios) as of June 30, 1995
and 1994. On June 30, 1996, our appointment as principal accountants was
terminated. We have read Stratus Fund, Inc.'s statements included under Item 77k
of its Form N-SAR dated August 23, 1996, and we agree with such statements,
except that we are not in a position to agree or disagree with Stratus Fund,
Inc.'s statement that the change was approved by the Board of Directors.
Very truly yours,
KPMG Peat Marwick LLP
Deloitte & Touche LLP
Suite 1040
NBC Center
Lincoln, NE 68508-1469
402-474-1776
Board of Directors
Stratus Fund, Inc.
Lincoln, Nebraska
In planning and performing our audit of the financial statements of Stratus
Fund, Inc. Growth, Government Securities, Capital Appreciation, and Intermediate
Government Bond Portfolios (the Stratus Fund, Inc. Portfolios) for the year
ended June 30, 1996, on which we have issued our report dated July 22, 1996, 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 to comply with the
requirements of Form N-SAR, not to provide assurance on the internal control
structure.
The management of Stratus Fund Inc. Portfolios 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 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
June 30, 1996.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
DELOITTE & TOUCHE LLP
Lincoln, Nebraska
July 22, 1996
