U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM N-17f-2
Certificate of Accounting of Securities and Similar Investments in the
Custody of Management Investment Companies
Pursuant to Rule 17f-2 (17 CFR 270.17f-2)
Date examination completed: October 31, 1997
1. Investment Company Act File Number 811-6259
2. State Identification Number: NE
3. Exact number of investment company as
specified in registration statement: 5
4. Address of principal executive office: Stratus Fund, Inc.
200 Centre Terrace
1225 L Street
Lincoln, NE 68508
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INDEPENDENT ACCOUNTANT'S REPORT
Board of Directors
Stratus Fund, Inc.
Lincoln, Nebraska
We are the auditors of Stratus Fund, Inc. (the Fund). Union Bank & Trust Company
(Union Bank), a related entity, is custodian of the Fund and the Fund is
therefore subject to the provisions of Rule 17f-2 under the Investment Company
Act of 1940. Accordingly, we have, without prior notice to the Fund or Union
Bank, accounted for the Fund's investment securities held by Union Bank as of
the close of business on October 31, 1997. It is understood that this report is
solely for the use of management and for the information of the Securities and
Exchange Commission and should not be used for any other purpose.
Union Bank, in addition to acting as custodian for the Fund, is custodian for
other customers. Agents of Union Bank hold, or account for by book entry,
securities which are the responsibility of Union Bank through custodian or trust
arrangements. Securities held by agents of Union Bank, while identified by such
agents as being deposited by Union Bank, cannot be identified by such agents as
to the specific customers of Union Bank who have securities included in such
deposits.
Union Bank represented to us that the securities owned by the Fund on October
31, 1997 were held for the account of Union Bank by Fifth Third Bank, or, in the
case of Fund investments in other registered investment companies, by the
investment company. We obtained confirmations from Fifth Third Bank, other
registered investment companies, and brokers relative to pending trades of the
securities held for the account of the Fund as of October 31, 1997. We reviewed
Union Bank's reconciliation of the securities confirmations to Union Bank's
internal records, identifying securities held by Fifth Third Bank or other
registered investment companies as part of Union Bank's aggregate security
position. We also reviewed Union Bank's records which show the owners of the
securities held by Fifth Third Bank or other registered investment companies for
the account of Union Bank at October 31, 1997. We determined that securities,
identified by such records as the property of the Fund, were in agreement with
the Fund's records of securities owned at October 31, 1997. We also agreed an
analysis of portfolio transactions recorded subsequent to June 30, 1997 in the
investment accounts to supporting records and verified a sample of portfolio
security transactions to supporting records and documentation.
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Because the above procedures were not sufficient to constitute an audit made in
accordance with generally accepted auditing standards, we do not express an
opinion on the investment accounts referred to above as of the date indicated.
In connection with the procedures referred to above, no matters came to our
attention that caused us to believe that the specified accounts should be
adjusted. Had we performed additional procedures or had we made an audit of the
financial statements of the Fund in accordance with generally accepted auditing
standards, matters might have come to our attention that would have been
reported to you. This report relates only to the investments specified above and
does not extend to the financial statements of the Fund, taken as a whole for
any date or period.
Deloitte & Touche, LLP
Lincoln, Nebraska
November 17, 1997
