Report of Independent Accountants
To the Board of Directors and Management of T.
Rowe Price Associates, Inc.
We have examined management's assertion,
included in the accompanying Management
Statement Regarding Compliance with the
Application for, and the Orders of, Exemption
granted
by the Securities & Exchange Commission dated
November 22, 2000, ("Management
Statement"). The Management Statement asserts
that as of October 31, 2000, and for the period
from July 23, 1999, through October 31, 2000,
T. Rowe Price Associates, Inc. (the "Company")
has established and maintained procedures
reasonably designed to achieve compliance with
the
conditions set forth in the Application, dated
November 12, 1998, filed by the Company (Rel.
No.
IC - 23532) as amended on October 29, 1999,
(Rel. No. IC - 24116) and the Orders by the
Securities & Exchange Commission on December 8,
1998 (Rel.IC - 23590) and November 23,
1999, (Rel. IC - 24159), collectively, the
"Orders". Management is responsible for the
Company's compliance with those requirements.
Our responsibility is to express an opinion on
management's assertion about the Company's
procedures to achieve compliance with the
conditions of the Orders based on our
examination.
Our examination was made in accordance with
attestation standards established by the
American
Institute of Certified Public Accountants and,
accordingly, included examining, on a test
basis,
evidence about the Company's procedures to
achieve compliance with the Orders and
performing
such other procedures as we considered
necessary in the circumstances. Our
examination
procedures included an assessment of the
establishment and maintenance of procedures
reasonably designed to achieve the following
objectives set forth in the Orders (all
capitalized
terms as defined in the Orders):
a) The Interfund Rate on all interfund loans is
higher than the Repo Rate and, if applicable
the
yield of the Reserve Investment Funds, but
lower than the Bank Loan Rate;
b) All Interfund loans comply with the
collateral requirements as set forth in the
Orders;
c) All interfund loans comply with the
percentage limitations on Interfund borrowing
and
lending;
d) Interfund borrowing and lending demand is
allocated in accordance with procedures
established by the funds' Board of Directors;
and
e) The interest rate on any interfund loan does
not exceed the interest rate on any third party
borrowings of a borrowing fund at the time of
the interfund loan.
We believe that our examination provides a
reasonable basis for our opinion. Our
examination
does not provide a legal determination on the
T. Rowe Price Funds' compliance with specified
requirements of the Orders.
Because of inherent limitations in internal
control, errors or fraud may occur and not be
detected.
Also, projections of any evaluation of internal
control over the Interfund Lending Program 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 control activities may
deteriorate.
In our opinion, management's assertion that T.
Rowe Price Associates, Inc. has established and
maintained procedures reasonably designed to
achieve compliance with the Orders as of
October
31, 2000, and for the period from July 23,
1999, through October 31, 2000, is fairly
stated, in all
material respects, based upon the criteria set
forth in the Orders and the accompanying
Management Statement.
This report is intended solely for the
information and use of the Boards of Directors
and
management of the T. Rowe Price Funds, and the
Securities & Exchange Commission and should
not be used for any other purposes.
PRICEWATERHOUSECOOPERS
PricewaterhouseCoopers LLP
Baltimore, Maryland
November 22, 2000
