The Board of Trustees
The Commerce Funds
In planning and performing our audits of the financial statements of Short-
Term Government Fund, Bond Fund, Balanced Fund, Value Fund
(formerly Growth and Income Fund), Growth Fund, MidCap Growth Fund
(formerly MidCap Fund), International Equity Fund, National Tax-Free
Intermediate Bond Fund, and Missouri Tax-Free Intermediate Bond Fund,
portfolios of The Commerce Funds, (collectively, The Commerce Funds)
for the year ended October 31, 2000, 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, not to provide assurance on internal control.
The management of The Commerce Funds 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 accounting principles generally accepted
in the United States of America. Those controls include the
safeguarding of assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of internal control to future periods is subject to the risks
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 the internal control components
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
internal control and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined
above as of October 31, 2000.
This report is intended solely for the information and use of management,
the Board of Trustees of The Commerce Funds, and the Securities
and Exchange Commission and is not intended to be and should not be used
by anyone other than these specified parties.
December 15, 2000
KPMG LLP
