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SIGNATURE BRUCE N. ALPERT
TITLE V.PRESIDENT/TREAS
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Report of Independent Auditors
To the Board of Directors of
Gabelli Capital Asset Fund
(a series of Gabelli Capital Series Funds, Inc.)
In planning and performing our audit of the financial statements of Gabelli
Capital Asset Fund (a series of Gabelli Capital Series Funds, Inc.) for the
year ended December 31, 1998, we considered its internal control, including
control activities for safeguarding securities, in order 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 the internal control.
The management of Gabelli Capital Asset Fund 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 controls. Generally, controls that are relevant to an
audit pertain to the entity's objective of preparing financial statements
for external purposes that are fairly presented in conformity with generally
accepted accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may
occur and not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of
the design and operation 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 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 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 and its operation, including controls
for safeguarding securities, that we consider to be material weaknesses as
defined above at December 31, 1998.
This report is intended solely for the information and use of the board of
directors and management of Gabelli Capital Asset Fund 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
February 3, 1998
