Report of Ernst & Young LLP, Independent Auditors
To the Board of Directors of
The Marshall Funds, Inc.:
In planning and performing our audits of the financial statements
of The Marshall Funds, Inc. (the Funds)for the year ended
August 31, 2000, we considered its internal control, including
control activities for safeguarding securities, to determine
our auditing procedures for the purpose of expressing our opinion
on the financial statements and to comply with the requirements
of Form N-SAR, and not to provide assurance on internal control.
The management of the Funds is responsible for establishing
and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs
of internal control. Generally, internal controls that are
relevant to an audit pertain to the Funds' objective of preparing
financial statements for external purposes that are fairly
presented in conformity with generally accepted accounting
principles. Those internal controls include the safeguarding
of assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in any internal control,
misstatements due to errors or fraud may occur and not be
detected. Also, projections of any evaluation of internal
control to future periods are subject to the risk that internal
control may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures
may deteriorate.
Our consideration of internal control would not necessarily
disclose all matters in internal control that might be material
weaknesses under standards established by the American Institute
of Certified Public Accountants. A material weakness is a
condition in which the design or operation of one or more of
the specific internal control components does not reduce to a
relatively low level the risk that errors or fraud in amounts
that would be material in relation to the consolidated financial
statements being audited may occur and not be detected within
a timely period by employees in the normal course of performing
their assigned functions. However, we noted no matters involving
internal control, including control activities for safeguarding
securities, and its operation that we consider to be material
weaknesses as defined above as of August 31, 2000.
This report is intended solely for the information and use of
the board of trustees and management of The Marshall Funds, Inc.,
and the Securities and Exchange Commission and is not intended
to be and should not be used by anyone other than these
specified parties.
ERNST & YOUNG LLP
October 13, 2000
