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SIGNATURE NICHOLAS DALMASO
TITLE ASSISTANT SECRETARY
EXHIBIT 77B.1
[KPMG Peat Marwick LLP Letterhead]
The Board of Trustees and Shareholders of
Explorer Institutional Active Core Fund:
In planning and performing our audit of the financial statements of Explorer
Institutional Active Core Fund (the "Fund") for the year ended
December 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 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 the
preparation of financial statements in accordance with generally accepted
accounting principles.
Because of inherent limitations in any systems of 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
December 31, 1997.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
KPMG Peat Marwick LLP
February 10, 1998
EXHIBIT 77B.2
[KPMG Peat Marwick LLP Letterhead]
The Board of Trustees and Shareholders of
Explorer Institutional Limited Duration Fund:
In planning and performing our audit of the financial statements of Explorer
Institutional Limited Duration Fund (the "Fund") for the year ended December
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 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 the
preparation of financial statements in accordance with generally accepted
accounting principles.
Because of inherent limitations in any systems of 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
December 31, 1997.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
KPMG Peat Marwick LLP
February 10, 1998
NSAR ITEM 77C.1
The Explorer Institutional Active Core Fund
(a) An Annual Meeting of Shareholders was held on May 28, 1997.
(b) The election of Trustees of The Explorer Institutional Active Core Fund
(the "Fund") included:
None
(c) The following were voted on at the meeting:
1) Approval of New Investment Advisory Agreement in the event of a
change of control of the Adviser.
For 384,835 Against 0
4) For each VK Fund, to Ratify the Selection of KPMG Peat Marwick
LLP Independent Public Accountants for its Current Fiscal Year.
For 384,835 Against 0
NSAR ITEM 77C.2
The Explorer Institutional Limited Duration Fund
(a) An Annual Meeting of Shareholders was held on May 28, 1997.
(b) The election of Trustees of The Explorer Institutional Limited
Duration Fund (the "Fund") included:
None
(c) The following were voted on at the meeting:
1) Approval of New Investment Advisory Agreement in the event of
a change of control of the Adviser.
For 729,645 Against 0
4) For each VK Fund, to Ratify the Selection of KPMG Peat Marwick
LLP Independent Public Accountants for its Current Fiscal Year.
For 729,645 Against 0
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