June 19, 2000
To the Board of Directors and Shareholders of
T. Rowe Price Short-Term U.S. Government Fund, Inc.
In planning and performing our audit of the financial statements of T.
Rowe Price Short-Term U.S. Government Fund, Inc. (hereafter referred to
as the "Fund") for the year ended May 31, 2000, we considered its
internal control, 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 Fund 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 May 31, 2000.
This report is intended solely for the information and use of
management, the Board of Directors of T. Rowe Price Short-Term U.S.
Government Fund, Inc., and the Securities and Exchange Commission
and is not intended to be and should not be used by anyone other then
these specified parties.
PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Baltimore, Maryland
