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 July 19, 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 July 19, 1999,
and with respect to agreement of security purchases
and sales, for the period from June 30, 1999, the
date of our last audit, through July 19, 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 July 19,
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
Washington, DC
August 6, 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 July 19, 1999 and from June 30, 1999 (the date
of Deloitte & Touche LLP's last audit) through July 19,
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 July 19, 1999 and from June 30, 1999 (the
date of Deloitte & Touche LLP's last audit) through
July 19, 1999, with respect to securities reflected in
the investment accounts of Cappiello-Rushmore Trust.
Frank A. Cappiello
Chairman
Timothy N. Coakley
Vice President
