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Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
We, as members of management of the Cardinal Tax Exempt Money Market Fund and
Cardinal Fund (the "Funds"), are responsible for complying with the requirements
of subsection (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 controls over
compliance with those requirements. We have performed an evaluation of the
Funds' compliance with the requirements of subsection (b) and (c) of Rule 17f-2
as of September 30, 1998.
Based on this evaluation, we assert that the Funds were in compliance with the
requirements of subsection (b) and (c) of Rule 17f-2 of the Investment Company
Act of 1940 as of September 30, 1998 with respect to securities and similar
investments reflected in the investment account of the Funds.
Cardinal Tax Exempt Money Market Fund and Cardinal Fund
By:
Stephen Mintos
President
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Report of Independent Accountants
To the Board of Trustees
Cardinal Tax Exempt Money Market Fund and Cardinal Fund
We have examined management's assertion, included in the accompanying Management
Statement Regarding Compliance with Certain Provisions of the Investment Company
Act of 1940, that the Cardinal Tax Exempt Money Market Fund and Cardinal Fund
(the "Funds") were in compliance with the requirements of subsection (b) and (c)
of Rule 17f-2 of the Investment Company Act of 1940 ("the Act") as of September
30, 1998 with respect to securities and similar investments reflected in the
investment account of the Funds. Management is responsible for the Funds'
compliance with those requirements. Our responsibility is to express an opinion
on management's assertion about the Funds' 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 Funds' 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 September 30, 1998, and with respect to agreement of security
and similar investments purchases and sales, for the period from July 31, 1998
through September 30, 1998;
- - Confirmation of all securities and similar investments held by institutions
in book entry form (FEDERAL RESERVE BANK OF CLEVELAND, STATE STREET BANK &
TRUST CO., N.A., DEPOSITORY TRUST COMPANY, BANK OF NEW YORK, AND
PARTICIPANT TRUST COMPANY);
- - Reconciliation of confirmation results as to all such securities and
investments to the books and records of the Funds and the Custodian;
- - Confirmation of all repurchase agreements with brokers/banks and agreement
of underlying collateral with Fifth Third Bank records; and
- - Agreement of 2 security and/or investment purchases and 2 security and/or
investment sales or maturities since our last examination from the books
and records of the Funds 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 Funds' compliance with
specified requirements.
In our opinion, management's assertion that the Funds were in compliance with
the requirements of subsection (b) and (c) of Rule 17f-2 of the Investment
Company Act of 1940 as of September 30, 1998, with respect to securities and
similar investments reflected in the investment account of the Funds, is fairly
stated, in all material respects.
This report is intended solely for the information and use of management of the
Funds and the Securities and Exchange Commission and should not be used for any
other purpose.
Ernst & Young LLP
Cincinnati, Ohio
October 30, 1998
