MANAGEMENT STATEMENT REGARDING COMPLIANCE WITH CERTAIN
PROVISIONS OF THE INVESTMENT COMPANY ACT OF 1940
We, as members of management of the Pillar Funds (the "Trust"), are responsible
for complying with the requirements of subsections (b) and (c) of Rule 17f-2,
"Custody of Investments by Registered Management Investment Companies," of the
Investment Company Act of 1940. We are also responsible for establishing and
maintaining an effective internal control structure over compliance with those
requirements. We have performed an evaluation of the Trust's compliance with the
requirements of subsections (b) and (c) of Rule 17f-2 as of July 31, 1998,
August 31, 1998, and December 31, 1998.
Based on this evaluation, we assert that the Trust was in compliance with those
provisions of Rule 17f-2 of the Investment Company Act of 1940 as of July 31,
1998, August 31, 1998, and December 31, 1998.
Summit Bank
By:
/s/ Richard E. Mansfield
- ----------------
Richard E. Mansfield
Senior Vice President
<PAGE>
[Adopted in Release No. IC-17085 (( 84,434), effective September 25,
1989, 54 F.R. 32048]
U.S. Securities and Exchange Commission
Washington DC 20549
FORM N-17F-2
Form N-17f-2
Certificate of Accounting of Securities and Similar Investments in the Custody
of Management Investment Companies
Pursuant to Rule 17f-2 [17CFR 270.17f-2]
1. Investment Company Act File Number:
Pillar Funds
Date Examination Complete: 8/31/98
2. State Identification Number
See attached Exhibit A listing the fund availability by state (If applicable the
associated state permit number is provided).
3. Exact number of investment company as specified in registration statement:
33-44712
4. Address of principal executive office: (number, street, city, state, zip
code) One Freedom Valley, Oaks, PA 19456
<PAGE>
INSTRUCTIONS
This form must be completed by the investment companies that have custody of
securities or similar investments.
Investment Company
1. All items must be completed by the investment company
2. Give this form to the independent public accountant who, in compliance with
Rule 17f-2 under the Act and applicable state law, examines securities and
similar investments in the custody of the investment company.
Accountant
3. Submit this Form to the Securities and Exchange Commission and appropriate
state securities administrators when filing the certificate of accounting
required by Rule 17f-2 under the Act and applicable state law. File the original
and one copy with the Securities and Exchange Commission's principal office in
Washington DC, one copy with the region in which the investment company's
principal business operations are conducted, and one copy with the appropriate
state administrator(s), if applicable.
THIS FORM MUST BE GIVEN TO YOUR INDEPENDENT PUBLIC ACCOUNTANT
Note: The estimated average burden hours are made solely for purposes of the
Paperwork Reduction Act, and are not derived from a comprehensive or even a
representative survey or study of the costs of SEC rules and forms. Direct any
comments concerning the accuracy of the estimated average burden yours for
compliance with SEC rules and forms to Kenneth A. Fogash, Deputy Executive
Director, US Securities and Exchange Commission, 450 Fifth Street NW Washington
DC 20549 and Gary Waxman, Clearance Officer, Office of Management and Budget,
Room 3208 New Executive Office Building, Washington DC 20503.
<PAGE<
The Pillar Funds
CALIFORNIA A = Annual 506-0312
COLORADO A = Annual IC-96-11-010
GEORGIA O = Other 56-960452
ILLINOIS A = Annual 9839437
PENNSYLVANIA A = Annual 92-01-045MF
VIRGINIA A = Annual 2376
The Pillar Funds Class A & B Prospectus
LOUISIANA A = Annual 57827-
The Pillar Funds - U.S. Treasury Securities Money Mkt. Fund
CONNECTICUT A = Annual SI23231
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S-25 95 58
SOUTH CAROLINA A = Annual MF9899
WEST VIRGINIA G = Good Until S BC-30181
The Pillar Funds - U.S. Treasury Sec. Money Mkt. Fund, Class A
ARIZONA A = Annual S-0049568-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960647
TENNESSE A = Annual RM98-2528
TEXAS G = Good Until S C-50187
WASHINGTON G = Good Until S C-53381
The Pillar Funds - U.S. Treasury Sec. Money Mkt. Fund, Class I
ARIZONA A = Annual S-0049567-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960664
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50186
WASHINGTON G = Good Until S C-53371
The Pillar Funds - Mid Cap Fund
CONNECTICUT A = Annual SI23262
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S-25 95 56
SOUTH CAROLINA A = Annual MF9890
WEST VIRGINIA G = Good Until S BC-30175
<PAGE>
The Pillar Funds - Mid Cap Fund, Class A
ARIZONA A = Annual S-0049556-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960655
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50175
WASHINGTON G = Good Until S C-53391
The Pillar Funds - Mid Cap Fund, Class I
ARIZONA A = Annual S-0049555-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960649
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50174
WASHINGTON G = Good Until S C-53379
The Pillar Funds - Balanced Fund
CONNECTICUT A = Annual SI23261
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S-25 95 57
SOUTH CAROLINA A = Annual MF9891
WEST VIRGINIA G = Good Until S BC-30168
The Pillar Funds - Balanced Fund, Class A
ARIZONA A = Annual S-0049542-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960659
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50161
WASHINGTON G = Good Until S C-53392
The Pillar Funds - Balanced Fund, Class B
ARIZONA A = Annual S-0054109-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970523
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-52636
WASHINGTON G = Good Until S C-55774
WEST VIRGINIA G = Good Until S MF-21933
<PAGE>
The Pillar Funds - Balanced Fund, Class I
ARIZONA A = Annual S-0049541-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960648
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50160
WASHINGTON G = Good Until S C-53380
The Pillar Funds - PA Municipal Securities Fund
CONNECTICUT A = Annual SI24348
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S 26 31 56
SOUTH CAROLINA A = Annual MF9896
WEST VIRGINIA G = Good Until S BC-30177
The Pillar Funds - PA Municipal Securities Fund, Class A
ARIZONA A = Annual S-0049560-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960661
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50179
WASHINGTON G = Good Until S C-53394
The Pillar Funds - PA Municipal Securities Fund, Class I
ARIZONA A = Annual S-0049559-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960660
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50178
WASHINGTON G = Good Until S C-53393
The Pillar Funds - GNMA Fund
CONNECTICUT A = Annual SI24349
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S 25 31 58
SOUTH CAROLINA A = Annual MF9898
WEST VIRGINIA N = Not Register BC-30172
<PAGE>
The Pillar Funds - GNMA Fund, Class A
ARIZONA A = Annual S-0049550-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960663
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50169
WASHINGTON G = Good Until S C-53396
The Pillar Funds - GNMA Fund, Class I
ARIZONA A = Annual S-0049549-QUAL
MASSACHUSETTS A = Annual
MARYLAN A = Annual SM960662
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50168
WASHINGTON G = Good Until S C-53395
The Pillar Funds - International Equity Fund
CONNECTICUT A = Annual SI34064
NEVADA A = Annual
NEW YORK O = Other
SOUTH CAROLINA A = Annual MF9892
WEST VIRGINIA G = Good Until S BC-30174
The Pillar Funds - International Equity Fund, Class A
ARIZONA A = Annual S-0049552-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960646
NEW MEXICO A = Annual 985214
TENNESSE A = Annual RM98-2528
TEXAS G = Good Until S C-50171
WASHINGTON G = Good Until S C-53382
The Pillar Funds - International Equity Fund, Class B
ARIZONA A = Annual S-0054114-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970528
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-52641
WASHINGTON G = Good Until S C-55770
WEST VIRGINIA G = Good Until S MF-21938
The Pillar Funds - International Equity Fund, Class I
ARIZONA A = Annual S-0049551-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960639
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50170
WASHINGTON G = Good Until S C-53370
<PAGE>
The Pillar Funds - Prime Obligation Money Market Fund
CONNECTICUT A = Annual SI23247
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S25 95 50
SOUTH CAROLINA A = Annual MF9900
WEST VIRGINIA G = Good Until S BC-30178
The Pillar Funds - Prime Obligation Money Mkt. Fund, Class A
ARIZONA A = Annual S-0049562-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960654
NEW MEXICO A = Annual 985647
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50181
WASHINGTON G = Good Until S C-53383
The Pillar Funds - Prime Obligation Money Mkt. Fund, Class B
ARIZONA A = Annual S-0054115-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970522
NEW MEXICO A = Annual 985213
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-52642
WASHINGTON G = Good Until S C-55771
WEST VIRGINIA G = Good Until S MF-21939
The Pillar Funds - Prime Obligation Money Mkt. Fund, Class I
ARIZONA A = Annual S-0049561-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960638
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50180
WASHINGTON G = Good Until S C-53369
The Pillar Funds - Prime Obligation Money Mkt. Fund, Class S
ARIZONA A = Annual S-0054801-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970905
NEW MEXICO A = Annual 986669
TENNESSEE A = Annual RM98-2162
TEXAS G = Good Until S C-53157
WASHINGTON G = Good Until S C-56240
WEST VIRGINIA G = Good Until S MF-22639
<PAGE>
The Pillar Funds - Tax-Exempt Money Market Fund
CONNECTICUT A = Annual SI23236
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S-25 95 51 S
SOUTH CAROLINA A = Annual MF9901
WEST VIRGINIA G = Good Until S BC-30180
The Pillar Funds - Tax-Exempt Money Market Fund, Class A
ARIZONA A = Annual S-0049566-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960653
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50185
WASHINGTON G = Good Until S C-53384
The Pillar Funds - Tax-Exempt Money Market Fund, Class I
ARIZONA A = Annual S-0049565-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960637
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50184
WASHINGTON G = Good Until S C-53372
The Pillar Funds - Short-Term Investment Fund
CONNECTICUT A = Annual SI23239
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S-25 95 52
SOUTH CAROLINA A = Annual MF9893
WEST VIRGINIA G = Good Until S BC-30179
The Pillar Funds - Short-Term Investment Fund, Class A
ARIZONA A = Annual S-0049564-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960652
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50183
WASHINGTON G = Good Until S C-53385
<PAGE>
The Pillar Funds - Short-Term Investment Fund, Class I
ARIZONA A = Annual S-0049563-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960640
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50182
WASHINGTON G = Good Until S C-53373
The Pillar Funds - New Jersey Municipal Securities Fund
CONNECTICUT A = Annual SI23251
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S25 95 49
SOUTH CAROLINA A = Annual MF9895
WEST VIRGINIA G = Good Until S BC-30176
The Pillar Funds - NJ Municipal Securities Fund, Class A
ARIZONA A = Annual S-0049558-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960651
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50177
WASHINGTON G = Good Until S C-53386
The Pillar Funds - NJ Municipal Securities Fund, Class I
ARIZONA A = Annual S-0049557-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960641
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50176
WASHINGTON G = Good Until S C-53374
The Pillar Funds - Fixed Income Fund
CONNECTICUT A = Annual SI23254
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S25 95 53
SOUTH CAROLINA A = Annual MF9894
WEST VIRGINIA G = Good Until S BC-30171
<PAGE>
The Pillar Funds - Fixed Income Fund, Class A
ARIZONA A = Annual S-0049548-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960650
NEW MEXICO A = Annual 985217
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50167
WASHINGTON G = Good Until S C-53388
The Pillar Funds - Fixed Income Fund, Class B
ARIZONA A = Annual S-0054113-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970527
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-52640
WASHINGTON G = Good Until S C-55772
WEST VIRGINIA G = Good Until S MF-21937
The Pillar Funds - Fixed Income Fund, Class I
ARIZONA A = Annual S-0049547-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960642
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50166
WASHINGTON G = Good Until S C-53375
The Pillar Funds - Inter-Term Gov't Securities Fund
CONNECTICUT A = Annual SI23252
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S-25 95 54
SOUTH CAROLINA A = Annual MF9897
WEST VIRGINIA G = Good Until S BC-30173
The Pillar Funds - Inter-Term Gov't Securities Fund, Class A
ARIZONA A = Annual S-0049554-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960658
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50173
WASHINGTON G = Good Until S C-53387
<PAGE>
The Pillar Funds - Inter-Term Gov't Securities Fund, Class I
ARIZONA A = Annual S-0049553-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960643
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50172
WASHINGTON G = Good Until S C-53376
The Pillar Funds - Equity Value Fund
CONNECTICUT A = Annual SI23259
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S-25 95 48
SOUTH CAROLINA A = Annual MF9888
WEST VIRGINIA G = Good Until S BC-30170
The Pillar Funds - Equity Value Fund, Class A
ARIZONA A = Annual S-0049546-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960657
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50165
WASHINGTON G = Good Until S C-53389
The Pillar Funds - Equity Value Fund, Class B
ARIZONA A = Annual S-0054112-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970524
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-52639
WASHINGTON G = Good Until S C-55773
WEST VIRGINIA G = Good Until S MF-21936
The Pillar Funds - Equity Value Fund, Class I
ARIZONA A = Annual S-0049545-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960644
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50164
WASHINGTON G = Good Until S C-53377
<PAGE>
The Pillar Funds - Equity Income Fund
CONNECTICUT A = Annual SI23260
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S-25 95 55
SOUTH CAROLINA A = Annual MF9889
WEST VIRGINIA G = Good Until S BC-30169
The Pillar Funds - Equity Income Fund, Class A
ARIZONA A = Annual S-0049544-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960656
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50163
WASHINGTON G = Good Until S C-53390
The Pillar Funds - Equity Income Fund, Class B
ARIZONA A = Annual S-0054111-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970526
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-52638
WASHINGTON G = Good Until S C-55768
WEST VIRGINIA G = Good Until S MF-21935
The Pillar Funds - Equity Income Fund, Class I
ARIZONA A = Annual S-0049543-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960645
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-50162
WASHINGTON G = Good Until S C-53378
The Pillar Funds - U.S. Treasury Securities Plus M.Mkt. Fund
ARIZONA A = Annual S-0049569-QUAL
CONNECTICUT A = Annual SI 24350
DELAWARE A = Annual
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960636
NEVADA A = Annual
NEW YORK O = Other S 26 31 57
SOUTH CAROLINA A = Annual MF9902
TENNESSE A = Annual RM98-2528
TEXAS N = Not Register C-50188
WASHINGTON G = Good Until S C-53368
WEST VIRGINIA G = Good Until S BC-30182
<PAGE>
The Pillar Funds - Equity Growth Fund (f/k/a Growth Fund)
CONNECTICUT A = Annual SI42239
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other S 27 82 41
SOUTH CAROLINA A = Annual MF10462
The Pillar Funds - Equity Growth Fund, Class A (f/k/a Growth Fund)
ARIZONA A = Annual S-0053275-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970071
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-52098
WASHINGTON G = Good Until S C-55271
WEST VIRGINIA G = Good Until S MF-21624
The Pillar Funds - Equity Growth Fund, Class B
ARIZONA A = Annual S-0054110-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970525
TENNESSEE A = Annual RM98-2528
TEXAS G = Good Until S C-52637
WASHINGTON G = Good Until S C-55769
WEST VIRGINIA G = Good Until S MF-21934
The Pillar Funds - Equity Growth Fund, Class I (f/k/a Growth Fund)
ARIZONA A = Annual S-0053274-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970072
TENNESSE A = Annual RM98-2528
TEXAS G = Good Until S C-52097
WASHINGTON G = Good Until S C-55272
WEST VIRGINIA G = Good Until S MF-21623
The Pillar Funds - Institutional Select Money Market Fund
ARIZONA A = Annual S-0054800-QUAL
CONNECTICUT A = Annual SI43701
DELAWARE A = Annual
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970906
NEW MEXICO A = Annual 986668
NEVADA A = Annual
NEW YORK O = Other S 27 96 48
SOUTH CAROLINA A = Annual MF10782
TENNESSEE A = Annual RM98-2162
TEXAS G = Good Until S C-53156
WASHINGTON G = Good Until S C-56239
WEST VIRGINIA G = Good Until S MF-22444
<PAGE>
The Pillar Funds - High Yield Bond Fund
CONNECTICUT A = Annual
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other
SOUTH CAROLINA A = Annual MF11733
The Pillar Funds - High Yield Bond Fund - Class A
ARIZONA A = Annual S-0059669-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM981859
TENNESSEE A = Annual M98-3772
TEXAS G = Good Until S C-56977
WASHINGTON G = Good Until S C-59760
WEST VIRGINIA G = Good Until S MF-32884
The Pillar Funds - High Yield Bond Fund - Class B
ARIZONA A = Annual S-0059670-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM981860
TENNESSEE A = Annual
TEXAS G = Good Until S C-56978
WASHINGTON G = Good Until S C-59757
WEST VIRGINIA G = Good Until S MF-32886
The Pillar Funds - High Yield Bond Fund - Class I
ARIZONA A = Annual S-0059671-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM981861
TENNESSEE A = Annual
TEXAS G = Good Until S C-56979
WASHINGTON G = Good Until S C-59758
WEST VIRGINIA G = Good Until S MF-32888
<PAGE>
The Pillar Funds - Equity Index Fund
CONNECTICUT A = Annual
DELAWARE A = Annual
NEVADA A = Annual
NEW YORK O = Other
SOUTH CAROLINA A = Annual MF11734t
The Pillar Funds - Equity Index Fund, Class A
ARIZONA A = Annual S-059666-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM981862
TENNESSEE A = Annual
TEXAS G = Good Until S C-56974
WASHINGTON G = Good Until S C-59756
WEST VIRGINIA G = Good Until S MF-32889
The Pillar Funds - Equity Index Fund, Class B
ARIZONA A = Annual S-0059667-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM981863
TENNESSEE A = Annual
TEXAS G = Good Until S C-56975
WASHINGTON G = Good Until S C-59761
WEST VIRGINIA G = Good Until S MF-32885
The Pillar Funds - Equity Index Fund, Class I
ARIZONA A = Annual S-0059668-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM981864
TENNESSEE A = Annual
TEXAS G = Good Until S C-56976
WASHINGTON G = Good Until S C-59759
WEST VIRGINIA G = Good Until S MF-32887
SBP from download not on TAFUND.dbf
CALIFORNIA N = Not Register
WASHINGTON N = Not Register
Fund Name State Filing Type File Number
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Trustees of
The Pillar Funds and the
Securities and Exchange Commission:
We have examined management's assertion about The Pillar Funds' (the "Trust's")
compliance with the requirements of subsections (b) and (c) of Rule 17f-2 under
the Investment Company Act of 1940 as of August 31, 1998 included in the
accompanying Management Statement Regarding Compliance with Certain Provisions
of the Investment Company Act of 1940. Management is responsible for the Trust's
compliance with those requirements. Our responsibility is to express an opinion
on management's assertion about the Trust's compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Trust's compliance with those
requirements and performing such other procedures as we considered necessary in
the circumstances. Included among our procedures were the following tests
performed as of August 31, 1998, and with respect to agreement of security
purchases and sales, for the period from July 31, 1998 (the date of our last
examination) through August 31, 1998:
We agreed a sample of securities shown on the books and records of The Pillar
Funds as of August 31, 1998 to the safekeeping reports of Summit Bank, the
custodian, noting agreement of quantity and description, except for securities
purchased/sold but not received/delivered, pledged, or out for transfer on that
date, as to which we obtained documentation from the brokers.
For all securities shown on the safekeeping reports of Summit Bank as of August
31, 1998 which were designated as being held by institutions in book entry form
(which include but are not limited to securities owned by The Pillar Funds), we
confirmed all such securities with those institutions which use the book entry
method of accounting for securities (Bank of New York, Federal Reserve Bank and
The Depository Trust Company, the subcustodians). For a sample of securities on
the safekeeping reports of Summit Bank, we noted that the quantities and
descriptions of such securities listed on the safekeeping reports agreed with
the confirmations or that discrepancies were resolved. We tested, on a sample
basis, the resolution of such reconciling items between the custodian and
subcustodians.
<PAGE>
We confirmed repurchase agreements shown on the books and records of The Pillar
Funds as of August 31, 1998 by correspondence with the brokers and the
application of alternative procedures with respect to unsettled repurchase
agreement transactions, noting agreement of quantity and description. We also
agreed the underlying collateral for such repurchase agreements, as confirmed by
such brokers, with the Summit Bank safekeeping reports, noting that such
collateral was held for the account of The Pillar Funds.
We agreed a sample of security purchases and security sales since our last
report from the books and records of the Trust to broker confirmations.
We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on the Trust's compliance
with specified requirements.
In our opinion, management's assertion that The Pillar Funds were in compliance
with the requirements of subsections (b) and (c) of Rule 17f-2 of the Investment
Company Act of 1940 as of August 31, 1998 with respect to securities reflected
in the investment account of the Trust is fairly stated, in all material
respects.
This report is intended solely for the information and use of management and the
Board of Trustees of The Pillar Funds and the Securities and Exchange Commission
and should not be used for any other purpose.
/s/ ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
October 30, 1998
<PAGE>
