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<AVG-DEBT-PER-SHARE> 0
</TABLE>
The Board of Directors of
Prudential Europe Growth Fund, Inc.:
In planning and performing our audit of the
financial statements of Prudential Europe
Growth Fund, Inc. for the year ended April
30, 1996, we considered its internal control
structure, including procedures 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, not to provide
assurance on the internal control structure.
The management of the Fund 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 control structure are to provide
management with reasonable, but not absolute,
assurance that assets are safeguarded against
loss from unauthorized use or disposition and
that 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 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
April 30, 1996.
This report is intended solely for the
information and use of management and the
Securities and Exchange Commission.
June 13, 1996
For the fiscal year ended (a) 4/30/96
File number (c) 811-7167
SUB-ITEM 77I
Terms of New or Amended Securities
The Fund is authorized to issue 500 million Class
Z shares. Class Z shares are not subject to either an
initial or contingent deferred sales charge nor are
they subject to any distribution and/or service fee.
Class Z shares will be offered to a limited group of
eligible investors.
- 2 -
11815.DOC - Windows - 10/27/95
Board of Directors or Trustees of:
Prudential Adjustable Rate Prudential
IncomeVertible Fund
Securities Fund Prudential
Intermediate Global
The BlackRock Government Income Income Fund
Trust Prudential
Multi-Sector Fund
Prudential California Municipal Prudential
Municipal Bond Fund (3 Fund (2 Portfolios)
Portfolios)
Prudential Diversified Bond Prudential
Municipal Series Fund
Fund (13
Portfolios)
Prudential Equity Fund Prudential
National Municipals Fund
Prudential Equity Income Fund Prudential
Pacific Growth Fund
Prudential Allocation Fund (2 Prudential
Short-Term Global Income
Portfolios) Fund (2
Portfolios)
Prudential GNMA Fund Prudential
Structured Maturity Fund
Prudential Global Fund Prudential
U.S. Government Fund
Prudential Global Genesis Fund Prudential
Utility Fund
Prudential Global Natural Global
Utility Fund, Inc.
Resources Fund Nicholas-
Applegate Fund.
Prudential Government Income
Fund
Prudential Growth Opportunity
Fund
Prudential High Yield Fund
We have examined the accompanying description
of the Prudential Multiple Class Pricing
Worksheet (the "Worksheet") application of
State Street Bank and Trust Company ("State
Street"), custodian and recordkeeper for the
Prudential Mutual Funds (the "Funds"). Our
examination included procedures to obtain
reasonable assurance about whether (1) the
accompanying description presents fairly, in
all material respects, the aspects of State
Street's policies and procedures that may be
relevant to a Fund's internal control
structure relating to the Worksheet, (2) the
control structure policies and procedures
included in the description were suitably
designed to achieve the control objectives
specified in the description, if those
policies and procedures were complied with
satisfactorily, and (3) such policies and
procedures had been placed in operation as of
June 30, 1995. The control objectives were
specified by Prudential Mutual Fund
Management. Our examination was performed in
accordance with standards established by the
American Institute of Certified Public
Accountants and included those procedures we
considered necessary in the circumstances to
obtain a reasonable basis for rendering our
opinion.
In our opinion, the accompanying description
of the aforementioned application presents
fairly, in all material respects, the relevant
aspects of State Street's policies and
procedures that had been placed in operation
as of
June 30, 1995. Also, in our opinion, the
policies and procedures, as described, are
suitably designed to provide reasonable
assurance that the specified control
objectives would be achieved if the described
policies and procedures were complied with
satisfactorily.
In addition to the procedures we considered
necessary to render our opinion as expressed
in the previous paragraph, we applied tests to
specific policies and procedures, listed in
Section I, to obtain evidence about their
effectiveness in meeting the control
objectives, described in Section I during the
period from July 1, 1994 to June 30, 1995.
The nature, timing, extent, and results of the
tests are listed in Section II. In our
opinion the policies and procedures that were
tested, as described in Section II, were
operating with sufficient effectiveness to
provide reasonable, but not absolute,
assurance that the control objectives
specified in Section I were achieved during
the period from July 1, 1994 to June 30, 1995.
The relative effectiveness and significance of
specific policies and procedures at State
Street, and their effect on assessments of
control risk on the Funds are dependent on
their interaction with the policies,
procedures, and other factors present at
individual Funds. We have performed no
procedures to evaluate the effectiveness of
policies and procedures at individual Funds in
connection with this report.
The description of policies and procedures at
State Street is as of June 30, 1995, and
information about tests of the operating
effectiveness of specified policies and
procedures covers the period from July 1, 1994
to June 30, 1995. Any projection of such
information to the future is subject to the
risk that, because of change, the description
may no longer portray the system in existence.
The potential effectiveness of specified
policies and procedures at State Street is
subject to inherent limitations and,
accordingly, errors or irregularities may
occur and not be detected. Furthermore, the
projection of any conclusions, based on our
findings, to future periods is subject to the
risk that changes may alter the validity of
such conclusions.
This report is intended solely for use by the
management and Boards of Directors/Trustees of
the Funds, the independent auditors of the
Funds and the Securities and Exchange
Commission.
August 21, 1995
SECTION I
Policies and Procedures
Placed in Operation
Prudential Multiple Class Pricing Worksheet
The Prudential Mutual Funds (the "Funds") have
adopted a multiple class pricing system. The
multiple class pricing system consists of
three classes of shares (Class A, Class B and
Class C for all funds except the Florida
Series of Prudential Municipal Series Fund.
This Fund offers Class A and Class D shares.)
for the Funds. The Class A shares are subject
to a front-end sales load and the Class B,
Class C and Class D shares are subject to a
contingent deferred sales charge. Each of the
classes of shares represent interests in the
same portfolio of investments of the
respective Fund and are identical in all
respects, except that each class is subject to
different distribution expenses and has
exclusive voting rights with respect to the
Rule 12b-1 distribution plan pursuant to which
such distribution expenses are paid.
In order to allocate income and expenses among
the classes of shares, State Street Bank and
Trust Company (the Funds' custodian and
recordkeeper) utilizes the Prudential Multiple
Class Pricing Worksheet (the "Worksheet") (see
Exhibit I). The Worksheet is a manual
supplementary application that extracts
relevant data from the Funds' primary
accounting system, allocates income and
expenses among the classes of shares and
computes the daily net asset value and, if
applicable, the dividend/distribution for each
class of shares. Internal accounting controls
that are relevant to the Fund can be divided
into two components - controls related to the
mutual fund accounting system resident at
State Street Bank and Trust Company (the
"primary accounting system") and controls
related to the Worksheet.
The specific control objectives and policies
and procedures relating to the Worksheet are
described on pages 4, 5 and 6. A description
of the tests of the policies and procedures
designed to obtain evidence about the
operating effectiveness of those policies and
procedures in achieving the specific control
objectives is included in Section II.
Control Objectives and
Policies and Procedures
Prudential Multiple Class
Pricing Worksheet
The Worksheet is a supplementary manual
application to the Funds' primary
accounting system. Certain data is extracted
from the primary accounting system to allocate
income and expenses and to calculate the daily
net asset value and, if applicable,
dividends/distributions for each class of
shares. The primary accounting system
includes the details of transactions in
accordance with the Investment Company Act of
1940, as amended.
The following represents the internal
accounting control objectives and policies and
procedures for the allocation of income and
expenses and the computation of the net asset
value and, if applicable, the
dividend/distribution for each class of shares
utilizing the Worksheet. It does not cover
the internal accounting control policies and
procedures surrounding the processing of
information into the Funds' primary accounting
system.
CONTROL POLICIES CONTROL OBJECTIVES
AND PROCEDURES
A. Capital
share activity as reported by the
1. Daily,
the transfer agent forwards reports
of
Fund's transfer agent is recorded for each
capital share activity
for each class which
class in an accurate and timely manner by
includes a summary of subscriptions,
the Fund.
redemptions, exchanges and other
inform
ation
(the
"Super
sheet"
).
The
openin
g
day's
balanc
e for
shares
outstanding
and
curren
t day
activi
ty is
record
ed on
the
Worksh
eet.
2.
Estima
ted
interi
m
share
activi
ty for
the
curren
t day
not
record
ed in
the
Supers
heet
is
receiv
ed via
telefa
x from
the
transf
er
agent
and is
record
ed for
each
class
on the
Worksh
eet.
3. A
report
of
outsta
nding
shares
eligib
le for
divide
nds is
receiv
ed
from
the
transf
er
agent
and is
record
ed for
each
class
on the
Worksh
eet.
B. Net
Asset Value ("NAV") and, if
applic
able,
1.
The
prior
days
ending
NAV
per
share
the
divide
nd/dis
tribut
ion
for
each
class
(unrou
nded)
for
each
class
is
agreed
to the
are
accura
tely
comput
ed on
a
daily
basis.
prior
day's
Worksh
eet.
2.
The
daily
net
capita
l
stock
activi
ty for
each
class
for
the
curren
t day
is
agreed
to the
Supers
heet
as
descri
bed in
Contro
l
Proced
ures
A.1,
2. and
3.,
above.
CONTROL POLICIES
CONTROL OBJECTIVES
AND PROCEDURES
3.
Percentage
Assets by
Class and
Percentage
Dividend
Assets by
Class are
calculated
for each
class
based upon
informatio
n from the
prior day
Worksheet,
the
Supersheet
and the
telefax
from the
transfer
agent.
4.
Allocate
investment
income
among
classes
based on
the
appropriat
e asset
allocation
percentage
for each
class.
5.
Agree
composite
income
accounts,
management
fees,
other
expenses,
realized
gains and
losses,
and
unrealized
appreciati
on/depreci
ation to
the
primary
accounting
system of
the Fund.
6.
Allocate
expenses
among
classes as
follows:
a.
Expenses
directly
attributab
le
to each
class (12b-
1
distributi
on
expenses)
are
calculated
and
recorded
to that
class.
b.
Expenses
attributab
le to both
classes
are
allocated
in
accordance
with the
appropriat
e asset
allocation
percentage
for each
class.
7.
Allocate
realized
and
unrealized
gains and
losses
among the
classes in
accordance
with the
appropriat
e asset
allocation
percentage
of each
class.
8.
Record
dividends/
distributi
ons to
shareholde
rs of each
class in
the
primary
accounting
system.
9.
Aggregate
the net
assets for
each class
and agree
to the
total net
assets per
the
primary
accounting
system.
10. For
each
class,
reconcile
the
current
day's NAV
and, if
applicable
, the
dividend/d
istributio
n to the
previous
day's NAV
and
dividend/d
istributio
n for each
class.
CONTRO
L
POLICI
ES
CONTROL OBJECTIVES AND
PROCEDURES
11. The
above
procedures
are
reviewed
by the
Fund
supervisor
or
manager.
SECTION II
Tests of Operating
Effectiveness Prudential
Multiple Class Pricing
Worksheet
July 1, 1994 to June
30, 1995
We reviewed the methodology and procedures for
calculating the daily net asset value and, if
applicable, the dividends/distributions of the
classes of shares and the allocation of income
and expenses among the classes of shares.
The following are the detailed procedures
which we performed with respect to the
Worksheet. These procedures were performed
for selected days encompassing all Funds
subject to multiple class pricing during the
year ended June 30, 1995, which we believe is
a representative sample, to test compliance
with the control policies and procedures as
described in Section I.
Prudential Mutual Fund Management, Inc. is the
manager of the Funds and has represented to us
that adequate facilities are in place to
ensure implementation of the methodology and
procedures for calculating the net asset value
and dividends/distributions of the classes of
shares and the allocation of income and
expenses among the classes of shares. Based
on our review of the description of the
policies and procedures of the Worksheet, as
described in Section I, and performance of
tests of operating effectiveness as described
in Section II, we concur with such
representation.
Agreed "Prior Day NAV Per Share" to
the previous day's Worksheet.
Agreed "Shares Outstanding Beginning
of the Day" to the previous day's
Worksheet and to the transfer agency
records for each class.
Recalculated "Activity/Estimate" by
adding the estimated interim share
activity reported via fax from the
transfer agent and the current day's
"Capital Stock Activity" reported on the
Supersheet for each class.
Recalculated "Current Shares
Outstanding" by adding "Shares
Outstanding Beginning of the Day" and
"Activity/Estimate" for each class.
Recalculated for each class
"Adjusted Total Assets" by multiplying
"Prior Day NAV Per Share" by "Current
Shares Outstanding".
Recalculated "Percentage Assets-
Class A/Front End" by dividing "Adjusted
Total Assets-Class A/Front End" by
"Adjusted Total Assets Composite".
Recalculated "Percentage Assets-
Class B(D)/Back End" by dividing
"Adjusted Total Assets-Class B(D)/Back
End" by "Adjusted Total Assets
Composite".
Agreed "Dividend Shares" to the
transfer agency records for each class.
Recalculated "Current Dividend
Shares" by adding "Dividend Shares
Beginning of Day" and "Activity/Estimate"
for each class.
Recalculated for each class
"Adjusted Dividend Assets" by multiplying
"Prior Day NAV Per Share" by "Current
Dividend Shares".
Recalculated "Percentage Dividend
Assets-Class A/Front End" by dividing
"Adjusted Dividend Assets-Class A/Front
End" by "Adjusted Dividend Assets
Composite".
Recalculated "Percentage Dividend
Assets-Class B(D)/Back End" by dividing
"Adjusted Dividend Assets-Class B(D)/Back
End" by "Adjusted Dividend Assets
Composite".
Agreed composite total of each component of
income to the primary
accounting system.
Recalculated the allocation for each
class of each component of income for daily
dividend funds by multiplying the composite
total by "Percentage Dividend Assets-Class
A/Front End" and "Percentage Dividend Assets-
Class B(D)/Back End," and for non-daily
dividend funds by multiplying the composite
total by "Percentage Assets-Class A/Front End"
and "Percentage Assets-Class B(D)/Back End".
Recalculated "Daily Income," composite
and for each class, by totaling each component
of income.
Agreed composite total "Management Fee"
and "Other Fixed Expenses" to the primary
accounting system.
Recalculated the allocation for each
class of "Management Fee" and "Other Fixed
Expenses" for daily dividend funds by
multiplying the composite total by "Percentage
Dividend Assets-Class A/Front End" and
"Percentage Dividend Assets-Class B(D)/Back
End," and non-daily dividend funds by
multiplying the composite total by "Percentage
Assets-Class A/Front End" and "Percentage
Assets-Class B(D)/Back End".
Agreed the "12b-1 Fee-Class A/Front End" and
"12b-1 Fee-Class
B(D)/Back End" to the respective "PC Expense
Worksheet".
Recalculated "Daily Expense," composite
and for each class, by totaling "Management
Fee," "12b-1 Fee" and "Other Fixed Expenses".
Recalculated "Daily Net Income" for each
class by subtracting "Daily Expense" from
"Daily Income".
Recalculated "Dividend Rate" for each
class for daily dividend funds by dividing
"Daily Net Income" by "Dividend Shares
Beginning of Day-Class A/Front End" and
"Dividend Shares Beginning of Day-Class
B(D)/Back End".
Agreed "Daily Income" and "Income
Distribution" for each class to the primary
accounting system.
Agreed the "Capital Gain Distribution" to
the amount recorded in the primary accounting
system.
Agreed composite total "Realized
Gain/Loss" and "Unrealized
Appreciation/Depreciation" to the primary
accounting system.
Recalculated the allocation for each
class of "Realized Gain/Loss" and "Unrealized
Appreciation/Depreciation" by multiplying the
composite amount by the "Percentage Assets-
Class A/Front End" and "Percentage Assets-
Class B(D)/Back End".
Agreed "Prior Days Net Assets" to the previous
day's Worksheet.
Recalculated "Net Assets", composite and
for each class, by totaling "Daily Net
Income", "Income Distributed", "Capital Stock
Activity", "Capital Gain Distribution",
"Realized Gain/Loss", "Unrealized
Appreciation/Depreciation", and "Prior Days
Net Assets".
Recalculated "NAV Per Share" dividing the
"Net Assets-Class A/Front End" and "Net Assets
- - Class B(D)/Back End" by "Current Shares
Outstanding - Class A/Front End" and "Current
Shares Outstanding - Class B(D)/Back End",
respectively.
Recalculated "Offering Price" for Class A
shares by applying the
"Load" percentage as stated in the fund's
prospectus.
