The Bear Stearns Funds
245 Park Avenue
New York, New York 10167
We are the auditors of the Bear Stearns Funds (the "Funds"). Custodial Trust
Company ("CTC"), a related entity, is custodian of the Funds and the Funds are
therefore subject to the provisions of Rule 17f-2 under the Investment Company
Act of 1940. Accordingly, we have, without prior notice to the Funds or to CTC,
accounted for the Funds' investment securities held by CTC as of the close of
business on March 31, 2000. It is understood that this report is solely for the
use of management and for the information of the Securities and Exchange
Commission and should not be used for any other purpose.
Custodial Trust Company, in addition to acting as custodian for the Funds, is
the holder of investment securities of other customers. Agents of CTC hold, or
account for by book entry, securities which are the responsibility of CTC
through custodian or trust arrangements. Securities held by such agents of CTC,
while identified by such agents as being deposited by CTC, cannot be identified
by such agents as to the specific customers of CTC who have securities included
in such deposits.
CTC confirmed to us that all securities owned by the Funds on March 31, 2000
were held for the account of CTC by The Depository Trust Company, and/or the
Federal Reserve Book Entry System, and/or Participants Trust Company, agents of
CTC. We obtained schedules from CTC of the securities held for the Funds'
accounts as of March 31, 2000. We obtained confirmations from the agents of the
Securities held for the account of CTC as of March 31, 2000. We also obtained
schedules from the Funds listing securities held according to the Funds'
records. We reviewed CTC's reconciliation of CTC's internal records to the
Funds' records and determined that the records were in agreement.
Because the above procedures do not constitute an audit made in accordance with
accounting principles generally accepted in the United States of America, we do
not express an opinion on the investment accounts referred to above. In
connection with the procedures referred to above, no matters came to our
attention that caused us to believe that the specified accounts should be
adjusted. Had we performed additional procedures or had we audited the financial
statements of the Funds in accordance with auditing standards generally accepted
in the United States of America, matters might have come to our attention that
would have been reported to you. This report relates only to the investments
specified above and does not extend to the financial statements of the Funds,
taken as a whole for any date or period.
Deloitte & Touche LLP
New York, New York
April 21, 2000
<PAGE>
MANAGEMENT STATEMENT REGARDING COMPLIANCE WITH
CERTAIN PROVISIONS OF THE INVESTMENT COMPANY ACT OF 1940
We, as members of management of The Bear Stearns Funds (the "Funds"), are
responsible for complying with the requirements of subsections (b) and (c) of
Rule 17f-2, "Custody of Investments by Registered Management Investment
Companies," of the Investment Company Act of 1940. We are also responsible for
establishing and maintaining effective internal controls over compliance with
those requirements. We have performed an evaluation of the Funds' compliance
with the requirements of subsections (b) and (c) of Rule 17f-2 as of March 31,
2000, and from July 30, 1999 (the date of Deloitte & Touche LLP's last
examination) through March 31, 2000.
Based on this evaluation, we assert that the Funds were in compliance with the
requirements of subsections (b) and (c) of Rule 17f-2 of the Investment Company
Act of 1940 as of March 31, 2000 and from July 30, 1999 (the date of Deloitte &
Touche LLP's last examination) through March 31, 2000, with respect to
securities reflected in the investment accounts of The Bear Stearns Funds.
/s/ Frank J. Maresca
--------------------
Frank J. Maresca
The Bear Stearns Funds
Vice President and Treasurer
/s/ Vincent Pereira
--------------------
Vincent Pereira
The Bear Stearns Funds
Assistant Treasurer
