Cappiello-Rushmore Trust
4922 Fairmont Avenue
Bethesda, Maryland 20814
To the Board of Trustees of Cappiello-Rushmore Trust:
We are the auditors of the Cappiello-Rushmore Trust (the Trust), a
series investment company comprised of four portfolios, Utility Income,
Growth, Emerging Growth and Gold portfolios (the Portfolios).
Rushmore Trust and Savings, FSB (Rushmore Trust), a related entity, is
custodian of all of the Trust's portfolios and the Trust is therefore subject
to the provisions of Rule 17f-2 under the Investment Company Act of
1940. Accordingly, we have, without prior notice to the Trust or to
Rushmore Trust, accounted for the Portfolios' investment securities held
by Rushmore Trust as of the close of business on June 29, 1998. It is
understood that this report is solely for the use of management and for
the information of the Securities and Exchange Commission and should
not be used for any other purpose.
Rushmore Trust, in addition to acting as custodian for the Portfolios, is
custodian for other customers. Agents of Rushmore Trust hold, or account
for by book entry, securities that are the responsibility of Rushmore Trust
through custodial or trust agreements. Securities held by agents of
Rushmore Trust, while identified by such agents as being deposited by
Rushmore Trust, cannot be identified by such agents as to the specific
customers of Rushmore Trust who have securities included in such deposits.
Rushmore Trust confirmed to us that the portfolio securities owned by the
Trust on June 29, 1998 were held for the account of Rushmore Trust by
Mellon Bank, N.A. (Mellon), as agent for Rushmore Trust. We obtained
confirmation from Mellon of the securities held for the account of the
Rushmore Trust as of June 29, 1998. We reviewed Rushmore Trust's
reconciliation of Mellon's confirmation to Rushmore Trust's internal records,
identifying securities held by Mellon as a part of Rushmore Trust's aggregate
security position with Mellon. We also reviewed Rushmore Trust's records
that show the owners of the securities held by Mellon for the account of the
Rushmore Trust at June 29, 1998. We determined that these securities,
identified by such records as the property of the Trust's Portfolios, were in
agreement with the Trust's records of securities owned at June 29, 1998. In
addition, brokers confirmed to us the purchases and sales outstanding at June
29, 1998, which were in agreement with the Portfolios' records. We also
agreed an analysis of portfolio transactions recorded subsequent to December
19, 1997, the date of our most recent examination of the Trust's securities
required under Rule 17f-2, in the investment accounts to supporting records
and verified a sample of portfolio security transactions to supporting records
and documentation.
Because the above procedures were not sufficient to constitute an audit
conducted in accordance with generally accepted auditing standards, we do
not express an opinion on the investment accounts referred to above as of
the dates indicated. In connection with the procedures referred to above, no
matters came to our attention that caused us to believe that the specified
accounts should be adjusted. Had we performed additional procedures or had
we conducted an audit of the financial statements of the Trust in accordance
with generally accepted auditing standards, matters might have come to our
attention that would have been reported to you. This report relates only to
the investments specified above and does not extend to the financial
statements of the Trust, taken as a whole for any date or period.
Deloitte & Touche LLP
Washington, DC
August 7, 1998
