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<PAGE> PAGE 2
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<PAGE> PAGE 9
SIGNATURE HEIKO H. THIEME
TITLE CEO
This report is signed on behalf of the registrant (or depositor or trustee).
City of New York State of New York Date: April 9, 1997
Name of Registrant, Depositor or Trustee: American Heritage Growth Fund, Inc.
By (Name and Title): Witness (Name and Title):
/s/ Heiko H. Thieme
- ----------------------------------- ----------------------------------------
Heiko H. Thieme,
Chief Executive Officer
Landsburg Platt Raschiatore & Dalton
Certified Public Accountants
117 South 17th Street 13th Floor Philadelphia, Pennsylvania 19103
215-561-6633 FAX 215-561-2070
February 28, 1997
To The Board of Directors
American Heritage Growth Fund, Inc.
1370 Avenue of the Americas
31st Floor
New York, NY 10019
In planning and performing our audit of the financial statements of American
Heritage Growth Fund, Inc., for the year ended January 31, 1997, we considered
its internal control structure, including procedures for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing an opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on the internal control
structure.
The management of American Heritage Growth Fund, Inc. is responsible for
establishing and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to assess
the expected benefits and related costs of internal control structure policies
and procedures. Two of the objectives of an internal structure are to provide
management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and transactions
are executed in accordance with management's authorization and recorded
properly to permit preparation of financial statements in conformity with
generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and may not be detected. Also, projection of any
evaluation of the structure 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 the internal control structure would not necessarily
disclose all matters in the internal control structure 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 the specific internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities 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 the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
January 31, 1997, other than the following items.
The Fund's transfer agent was not able to provide us with bank reconciliations
on its account for the American Heritage Growth Fund, Inc., for the last three
months of the fiscal year ended January 31, 1997.
The daily bank reconciliations of the Fund's cash account did not take into
account the Fund's Custodian's 2 P.M. cut off time for requisitions to apply
any excess cash to be applied to any outstanding short term borrowing. At
January 31, 1997, this resulted in a change to the financial position of the
Fund to simultaneously increase cash and short term borrowing by $110,392. This
could affect the Fund's estimate as to its daily accrual for interest income
and interest expense.
The Fund's accountant was not being provided on a timely basis the
classifications of securities purchased during the year, which they need in
order to test for the 25% diversification tests. Hard copies of this test that
were performed throughout the year by the Fund were not maintained for our
inspection.
We have advised management of these issues and they have noted them accordingly
and have told us that appropriate action will be taken as necessary.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
LANDSBURG PLATT RASCHIATORE & DALTON
VIA FAX
Exhibit 77.o
<TABLE>
<CAPTION>
Date of Issuer Number of Seller
Purchase Shares
<S> <C> <C> <C>
8/7/96 STARWOOD LODGING TRUST 3000 LEHMAN BROTHERS INC.
8/9/96 HEALTHCOR HOLDINGS INC. 100 ALEX BROWN & SONS INC.
9/20/96 MSC INDUSTRIAL DIRECT CO.-A 500 DONALDSON LUFKIN & JENRETTE
9/26/96 INDUSTRI-MATEMATIK INT'L CORP. 200 ALEX BROWN & SONS INC.
10/10/96 SUBURBAN OSTOMY SUPPLY CO. 400 DEAN WITTER REYNOLDS INC.
10/15/96 CARSON INC. 500 DONALDSON LUFKIN & JENRETTE SECURITIES CORP.
10/16/96 MEMCO SOFTWARE LTD. 1500 LEHMAN BROTHERS INC.
10/17/96 PRENTISS PROPERTIES TRUST 2000 LEHMAN BROTHERS INC.
10/23/96 CYBERMEDIA INC. 500 LEHMAN BROTHERS INC.
10/30/96 CENTRAL EUROPEAN MEDIA ENT. 2500 WERTHEIM SCHRODER & CO. INC.
11/7/96 PRIMUS TELECOMMUNICATIONS 7000 LEHMAN BROTHERS INC.
11/13/96 O'GARA COMPANY 8000 DILLON READ & CO INC.
11/14/96 CARNIVAL CORP. CL A 10000 LEHMAN BROTHERS INC.
11/22/96 HEALTHCARE FINANCIAL PARTN. 500 MONTGOMERY SECURITIES
</TABLE>
<PAGE>
