To the Audit Committee of the Board of Trustees of
Cappiello-Rushmore Trust:
We have examined management's assertion about
Cappiello-Rushmore Trust's (the Trust's) compliance
with the requirements of subsections (b) and (c) of
Rule 17f-2 under the Investment Company Act of 1940
(the Act) as of January 13, 1999, 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 January 13, 1999, and
with respect to agreement of security purchases and
sales, for the period from August 21, 1998, the date of
our last examination, through January 13, 1999:
* Confirmation of all securities held by Rushmore Trust
and Savings, FSB (Rushmore Trust) in book entry form
for the account of the Trust;
* Confirmation from Rushmore Trust that the securities
held for the account of the Trust were held for the
account of Rushmore Trust by Mellon Bank, N.A. (Mellon),
as agent for Rushmore Trust;
* Confirmation with Mellon of all securities held by
Mellon in book entry form for the account of Rushmore
Trust;
* Confirmation with brokers that all purchases and sales
outstanding were in agreement with the Trust's records;
* Reconciliation of all such securities to the books and
records of the Rushmore Trust and the Trust;
* Agreement of selected 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 Cappiello-Rushmore
Trust was in compliance with the requirements of subsections
(b) and (c) of Rule 17f-2 of the Investment Company Act of
1940 as of January 13, 1999 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 of Cappiello-Rushmore Trust and the
Securities and Exchange Commission and is not intended
to be and should not be used by anyone other than these
specified parties.
Deloitte & Touche LLP
Princeton, New Jersey
April 21, 1999
Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
We, as members of management of Cappiello-Rushmore Trust
(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 effective internal controls 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 January 13,
1999 and from August 21, 1998 (last examination date)
through January 13, 1999.
Based on this evaluation, we assert that the Trust was
in compliance with the requirements of subsections (b)
and (c) of Rule 17f-2 of the Investment Company Act of
1940 as of January 13, 1999 and from August 21, 1998
(last examination date) through January 13, 1999, with
respect to securities reflected in the investment accounts
of Cappiello-Rushmore Trust.
Frank A. Cappiello
Chairman
Timothy N. Coakley
Vice President
