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 of Investment Companies," of
the Investment Company Act of 1940. We are also responsible for establishing and
maintaining effective internal controls over compliance with those requirements.
We have performed an evaluation of the Company's compliance with the
requirements of subsections (b) and (c) of Rule 17f-2 as of August 31, 2000.
Based on this evaluation, we assert that the Company was 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, 2000, with respect to securities reflected in the
investment account of the Company.
SUMMIT BANK
By:
/s/ Richard E. Mansfield, Jr.
-----------------------------
Richard E. Mansfield, Jr.
Senior Vice President
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FUND NAME STATE FILING TYPE FILE NUMBER
The Pillar Funds
CALIFORNIA A = Annual 506-0312
COLORADO A = Annual IC-96-11-010
GEORGIA O = Other 56-960452
ILLINOIS A = Annual 9942392
PENNSYLVANIA A = Annual 92-01-045MF
VIRGINIA A = Annual 2376
The Pillar Funds Class A & B Prospectus
LOUISIANA A = Annual 63125
The Pillar Funds-U.S. Treasury Securities Money Mkt. Fund
CONNECTICUT A = Annual SI23231
DELAWARE A = Annual 2956
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
TENNESSEE A = Annual RM99-0362
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 RM99-0362
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 2950
NEVADA A = Annual
NEW YORK O = Other S-25 95 56
SOUTH CAROLINA A = Annual MF9890
WEST VIRGINIA G = Good Until S BC-30175
The Pillar Funds - Mid Cap Fund, Class I
ARIZONA A = Annual S-0049555-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960649
TENNESSEE A = Annual RM99-0362
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 2944
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 RM99-0362
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 RM99-0362
TEXAS G = Good Until S C-52636
WASHINGTON G = Good Until S C-55774
WEST VIRGINIA G = Good Until S MF-21933
The Pillar Funds - Balanced Fund, Class I
ARIZONA A = Annual S-0049541-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960648
TENNESSEE A = Annual RM99-0362
TEXAS G = Good Until S C-50160
WASHINGTON G = Good Until S C-53380
The Pillar Funds - PA Municipal Securities Fund
CONNECTICUT A = Annual SI 24348
DELAWARE A = Annual 2952
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 RM99-0362
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 RM99-0362
TEXAS G = Good Until S C-50178
WASHINGTON G = Good Until S C-53393
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 304815
TENNESSEE A = Annual RM99-0362
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 RM99-0362
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 RM99-0362
TEXAS G = Good Until S C-50170
WASHINGTON G = Good Until S C-53370
The Pillar Funds - Prime Obligation Money Market Fund
CONNECTICUT A = Annual SI23247
DELAWARE A = Annual 2953
NEVADA A = Annual
NEW YORK O = Other S-25 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 RM99-0362
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 304816
TENNESSEE A = Annual RM99-0362
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 RM99-0362
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 997515
TENNESSEE A = Annual RM99-0362
TEXAS G = Good Until S C-53157
WASHINGTON G = Good Until S C-56240
WEST VIRGINIA G = Good Until S MF-22639
The Pillar Funds - Tax-Exempt Money Market Fund
CONNECTICUT A = Annual SI23236
DELAWARE A = Annual 2955
NEVADA A = Annual
NEW YORK O = Other S-25 95 51
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 RM99-0362
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 RM99-0362
TEXAS G = Good Until S C-50184
WASHINGTON G = Good Until S C-53372
The Pillar Funds- New Jersey Municipal Securities Fund
CONNECTICUT A = Annual SI23251
DELAWARE A = Annual 2951
NEVADA A = Annual
NEW YORK O = Other S-25 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 RM99-0362
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 RM99-0362
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 2947
NEVADA A = Annual
NEW YORK O = Other S-25 95 53
SOUTH CAROLINA A = Annual MF9894
WEST VIRGINIA G = Good Until S BC-30171
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 304817
TENNESSEE A = Annual RM99-0362
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 RM99-0362
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 RM99-0362
TEXAS G = Good Until S C-50166
WASHINGTON G = Good Until S C-53375
The Pillar Funds - Inter-Term Gov't Securities Fund
ALASKA O = Other 99-02788
CONNECTICUT A = Annual SI23252
DELAWARE A = Annual 2949
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 RM99-0362
TEXAS G = Good Until S C-50173
WASHINGTON G = Good Until S C-53387
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 RM99-0362
TEXAS G = Good Until S C-50172
WASHINGTON G = Good Until S C-53376
The Pillar Funds - Equity Value Fund
ALASKA O = Other 99-02789
CONNECTICUT A = Annual SI23259
DELAWARE A = Annual 2946
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 RM99-0362
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 RM99-0362
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 RM99-0362
TEXAS G = Good Until S C-50164
WASHINGTON G = Good Until S C-53377
The Pillar Funds - Equity Income Fund
ALASKA O = Other 99-02790
CONNECTICUT A = Annual SI23260
DELAWARE A = Annual 2945
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 RM99-0362
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 RM99-0362
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 RM99-0362
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 2957
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM960636
NEVADA A = Annual
NEW YORK O = Other S 26 31 57
SOUTH CAROLINA A = Annual MF9902
TENNESSEE A = Annual RM99-0362
TEXAS N = Not Register C-50188
WASHINGTON G = Good Until S C-53368
WEST VIRGINIA G = Good Until S BC-30182
The Pillar Funds - Equity Growth Fund (f/k/a Growth Fund)
CONNECTICUT A = Annual SI42239
DELAWARE A = Annual 4805
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
ARIZONA A = Annual S-0053275-QUAL
KENTUCKY N = Not Register
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970071
TENNESSEE A = Annual RM99-0362
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 RM99-0362
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
ARIZONA A = Annual S-0053274-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970072
TENNESSEE A = Annual RM99-0362
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 5116
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM970906
NEW MEXICO A = Annual 997421
NEVADA A = Annual
NEW YORK O = Other S 27 96 48
SOUTH CAROLINA A = Annual MF10782
TENNESSEE A = Annual RM99-0362
TEXAS G = Good Until S C-53156
WASHINGTON G = Good Until S C-56239
WEST VIRGINIA G = Good Until S MF-22444
The Pillar Funds - High Yield Bond Fund
CONNECTICUT A = Annual
DELAWARE A = Annual 510
NEVADA A = Annual
NEW YORK O = Other S 28 43 60
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 RM99-0362
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 RM99-0362
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 RM99-0362
TEXAS G = Good Until S C-56979
WASHINGTON G = Good Until S C-59758
WEST VIRGINIA G = Good Until S MF-32888
The Pillar Funds - Equity Index Fund
CONNECTICUT A = Annual
DELAWARE A = Annual 509
NEVADA A = Annual
NEW YORK O = Other S 28 43 68
SOUTH CAROLINA A = Annual MF11734
The Pillar Funds - Equity Index Fund - Class A
ARIZONA A = Annual S-0059666-QUAL
MASSACHUSETTS A = Annual
MARYLAND A = Annual SM981862
TENNESSEE A = Annual RM99-0362
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 RM99-0362
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 RM99-0362
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
The Pillar Funds - Mid Cap Fund, Class A (TERMED 12/31/98)
CALIFORNIA N = Not Register
CONNECTICUT N = Not Register
DELAWARE N = Not Register
MARYLAND N = Not Register SM960655
NEW JERSEY N = Not Register
NEW YORK N = Not Register
PENNSYLVANIA N = Not Register
VIRGINIA N = Not Register
The Pillar Funds - GNMA Fund, Class A (TERMED 12/31/98)
ILLINOIS N = Not Register
NEW JERSEY N = Not Register
NEW YORK N = Not Register
OUTSIDE U.S. N = Not Register
PENNSYLVANIA N = Not Register
The Pillar Funds - GNMA Fund, Class I (TERMED 12/31/98)
CALIFORNIA N = Not Register
DELAWARE N = Not Register
NEW JERSEY N = Not Register
NEW YORK N = Not Register
PENNSYLVANIA N = Not Register
VIRGINIA N = Not Register
The Pillar Funds - Short-Term Investment Fund, Class A
ARIZONA N = Not Register S-0049564-QUAL
NEW JERSEY N = Not Register
NEW YORK N = Not Register
PENNSYLVANIA N = Not Register
The Pillar Funds - Short-Term Investment Fund, Class I
COLORADO N = Not Register
CONNECTICUT N = Not Register
DISTRICT OF COLUMBIA N = Not Register
GEORGIA N = Not Register
MASSACHUSETTS N = Not Register
MARYLAND N = Not Register SM960640
NEW JERSEY N = Not Register
NEVADA N = Not Register
NEW YORK N = Not Register
OUTSIDE U.S. N = Not Register
PENNSYLVANIA N = Not Register
SOUTH CAROLINA N = Not Register
TEXAS N = Not Register C-50182
</TABLE>
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 U.S. Treasury Securities
Money Market, Prime Obligation Money Market, Tax-Exempt Money Market, U.S.
Treasury Securities Plus Money Market, Institutional Select Money Market,
Fixed Income, High Yield Bond, New Jersey Municipal Securities,
Intermediate-Term Government Securities, Pennsylvania Municipal Securities,
Equity Growth, Equity Value, Equity Income, Equity Index, Mid Cap, and
Balanced Funds of 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, 2000, 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, 2000, and with respect
to agreement of security purchases and sales, for the period from June 30,
2000 (the date of our last examination) through August 31, 2000:
We agreed a sample of securities shown on the books and records of
The Pillar Funds as of August 31, 2000 to the safekeeping reports
of Summit Bank, the custodian, noting agreement of quantity and
description, except for those 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, 2000 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.
We confirmed all repurchase agreements shown on the books and
records of The Pillar Funds as of August 31, 2000 with 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 U.S. Treasury Securities
Money Market, Prime Obligation Money Market, Tax-Exempt Money Market, U.S.
Treasury Securities Plus Money Market, Institutional Select Money Market,
Fixed Income, High Yield Bond, New Jersey Municipal Securities,
Intermediate-Term Government Securities, Pennsylvania Municipal Securities,
Equity Growth, Equity Value, Equity Income, Equity Index, Mid Cap, and
Balanced Funds of 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, 2000, 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 27, 2000