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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 7
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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SIGNATURE RANDALL D. GREER
TITLE CHAIRMAN
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<LEGEND>
Pursuant to Item 602(c)(2)(i) of Regulations S-K and S-B.
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<NAME> KPM FUNDS, INC.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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Pursuant to Item 602(c)(2)(i) of Regulations S-K and S-B.
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<NAME> KPM FUNDS, INC.
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors of KPM Funds, Inc.:
In planning and performing our audits of the financial statements of the KPM
Equity Portfolio and the KPM Fixed Income Portfolio (collectively, the
"Portfolios") which comprise KPM Funds, Inc., for the year ended June 30, 1999
(on which we have issued our report dated August 6, 1999), we considered their
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 Portfolios' internal control.
The management of the Portfolios 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 any internal control, misstatements due to
error or fraud may occur and not be detected. Also, projections of any
evaluation of internal control to future periods are subject to the risk that
the internal control may become inadequate because of changes in conditions or
that the effectiveness of the design and operation deteriorate.
Our consideration of the Portfolios' 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 the internal control components does not reduce to a relatively low
level the risk that misstatements caused by error 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 the
Portfolios' internal control and its operation, including controls for
safeguarding securities, that we consider to be material weaknesses as defined
above as of June 30, 1999.
This report is intended solely for the information and use of management, the
Board of Directors of the Portfolios, and the Securities and Exchange Commission
and is not intended to be and should not be used by anyone other than these
specified parties.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
August 6, 1999
