PRAIRIE INSTITUTIONAL FUNDS, 497, 1995-06-15

PRAIRIE INSTITUTIONAL FUNDS
497, 1995-06-15

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<PAGE> 1

PRAIRIE INSTITUTIONAL FUNDS

CASH MANAGEMENT FUND
MUNICIPAL CASH MANAGEMENT FUND
TREASURY PRIME CASH MANAGEMENT FUND
U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND

PROSPECTUS

May 30, 1995

PLEASE READ CAREFULLY: Mutual fund shares are not bank deposits, are not
insured by the Federal Deposit Insurance Corporation, and are not obligations of
or guaranteed by The First National Bank of Chicago, any of its affiliates or
any other bank. Mutual fund shares involve investment risks, including the
possible loss of the principal amount invested. First Chicago Investment
Management Company acts as investment adviser and administrator of the funds in
the Prairie Family of Funds for which it is compensated as set forth in the
relevant prospectus.

First Chicago Investment Management Company
INVESTMENT ADVISER AND ADMINISTRATOR

Concord Financial Group, Inc.
DISTRIBUTOR

PROSPECTUS BEGINS ON PAGE ONE
<PAGE> 2

PRAIRIE INSTITUTIONAL FUNDS

PROSPECTUS -- May 30, 1995

Prairie Institutional Funds (the "Trust") is an open-end, management
investment company, known as a series fund. By this Prospectus, the Trust is
offering Institutional Shares and Service Shares of four separate diversified,
money market series (each, a "Fund"): Cash Management Fund, Municipal Cash
Management Fund, Treasury Prime Cash Management Fund and U.S. Government
Securities Cash Management Fund. Each Fund's goal is to provide investors with
as high a level of current income as is consistent with the preservation of
capital and the maintenance of liquidity, and, in the case of the Municipal Cash
Management Fund, exempt from Federal income tax.

Each Fund is designed for institutional investors, including banks, acting
for themselves or in a fiduciary, advisory, agency, custodial or similar
capacity, public agencies and municipalities. Fund shares may not be purchased
directly by individuals, although institutions may purchase shares for accounts
maintained by individuals. Such institutions have agreed to transmit copies of
this Prospectus to each individual or entity for whose account the institution
purchases Fund shares, to the extent required by law.

Each Fund's shares are sold without a sales charge. Investors can invest or
reinvest in or redeem shares at any time without charge or penalty imposed by
the Fund.

Institutional Shares and Service Shares are identical, except as to the
services offered to and expenses borne by each Class. Service Shares bear
certain costs pursuant to a Service Plan adopted in accordance with Rule 12b-1
under the Investment Company Act of 1940.

First Chicago Investment Management Company ("FCIMCO" or the "Investment
Adviser") serves as each Fund's investment adviser and administrator.

Concord Financial Group, Inc. (the "Distributor") serves as each Fund's
distributor.

AN INVESTMENT IN A FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE CAN BE NO ASSURANCE THAT EACH FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION ("FDIC"), THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
MONEY MARKET MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

------------------------------

This Prospectus sets forth concisely information about the Trust and Funds
that an investor should know before investing. It should be read and retained
for future reference.

The Statement of Additional Information, dated May 30, 1995, which may be
revised from time to time, provides a further discussion of certain areas in
this Prospectus and other matters which may be of interest to some investors. It
has been filed with the Securities and Exchange Commission and is incorporated
herein by reference. For a free copy, write to the Trust at 125 West 55th
Street, New York, New York 10019, or call 1-800-370-9446.

- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<S> <C>
Annual Fund Operating Expenses......................... 3
Condensed Financial Information........................ 5
Yield Information...................................... 8
Description of the Funds............................... 8
Risk Factors...................................... 11
Management of the Trust................................ 13
How to Buy Fund Shares................................. 15
How to Redeem Fund Shares.............................. 16
Service Plan........................................... 17
Dividends, Distributions and Taxes..................... 17
General Information.................................... 19
Appendix............................................... A-1
</TABLE>

2
<PAGE> 4

ANNUAL FUND OPERATING EXPENSES

(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)

<TABLE>
<CAPTION>
MUNICIPAL
CASH CASH
MANAGEMENT MANAGEMENT
FUND FUND
--------------------- ----------------------
INSTITUTIONAL SERVICE INSTITUTIONAL SERVICE
SHARES SHARES SHARES SHARES
---- ---- ---- ----
<S> <C> <C> <C> <C>
Management Fees (after fee waivers)........ .09% .09% .20% .20%
12b-1 Fees (distribution and servicing).... NONE .25% NONE .25%
Other Expenses............................. .26% .26% .15% .15%
Total Fund Operating Expenses (after fee
waivers)................................. .35% .60% .35% .60%
</TABLE>

EXAMPLE:
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time
period:

<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE INSTITUTIONAL SERVICE
SHARES SHARES SHARES SHARES
---- ---- ---- ----
<S> <C> <C> <C> <C>
1 YEAR.................................... $ 4 $ 6 $ 4 $ 6
3 YEARS................................... $11 $19 $11 $19
5 YEARS................................... $20 $33 $20 $33
10 YEARS................................... $44 $75 $44 $75
</TABLE>

<TABLE>
<CAPTION>
U.S.
GOVERNMENT
TREASURY SECURITIES
PRIME CASH CASH
MANAGEMENT MANAGEMENT
FUND FUND
----------------------- -----------------------
INSTITUTIONAL SERVICE INSTITUTIONAL SERVICE
SHARES SHARES SHARES SHARES
---- ---- ---- ----
<S> <C> <C> <C> <C>
Management Fees (after fee waivers)........ .00% .00% .12% .12%
12b-1 Fees (distribution and servicing).... NONE .25% NONE .25%
Other Expenses (after fee waivers and
expense reimbursements).................. .35% .35% .23% .23%
Total Fund Operating Expenses (after fee
waivers and expense reimbursements)...... .35% .60% .35% .60%
</TABLE>

EXAMPLE:
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time
period:

- --------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLES SHOULD NOT BE CONSIDERED AS REPRESENTATIVE OF
PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, EACH FUND'S
ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS
THAN 5%.
- --------------------------------------------------------------------------------

3
<PAGE> 5

The purpose of the foregoing table is to assist investors in understanding the
various costs and expenses borne by a Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. FCIMCO has undertaken, as to each Fund, until such time as it gives
investors at least 90 days' notice to the contrary, that if, in any fiscal year,
certain expenses, including the investment advisory and administration fees,
exceed .35% and .60% of the value of the average net assets of the Institutional
Shares and the Service Shares, respectively, for the fiscal year, the Trust may
deduct from the payment to be made to FCIMCO under the Investment Advisory or
Administration Agreements, or FCIMCO will bear, such excess expense. The
expenses noted above, without fee waivers or expense reimbursement arrangements,
would have been: Management Fees, .20% for each Fund, Other Expenses, 1.13% for
the Treasury Prime Cash Management Fund, and Total Fund Operating Expenses, .46%
for the Institutional Shares and .71% for the Service Shares of the Cash
Management Fund, 1.33% for the Institutional Shares and 1.58% for the Service
Shares of the Treasury Prime Cash Managment Fund, and .43% for the Institutional
Shares and .68% for the Service Shares of the U.S. Government Securities Cash
Management Fund. Institutions effecting transactions in Fund shares may charge
their clients direct fees in connection with such transactions; such fees are
not reflected in the foregoing table. See "Management of the Trust," "How to Buy
Fund Shares" and "Service Plan."

4
<PAGE> 6

CONDENSED FINANCIAL INFORMATION

The information in the following tables has been audited (except where
noted) by Ernst & Young LLP, each Fund's independent auditors, whose reports
thereon appear in the Statement of Additional Information. Further financial
data and related notes are included in the Statement of Additional Information,
available upon request.

FINANCIAL HIGHLIGHTS

Contained below is per share operating performance data, total investment
return, ratios to average net assets and other supplemental data for
Institutional Shares and Service Shares of the Cash Management Fund, U.S.
Government Securities Cash Management Fund and Treasury Prime Cash Management
Fund for the periods indicated. This information has been derived from
information provided in the Fund's financial statements. No financial data is
available for the Municipal Cash Management Fund, which had not commenced
operations as of the date of this prospectus.

CASH MANAGEMENT FUND(1)

<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
------------------------------------------ SERVICE SHARES
10-MONTH --------------
YEAR ENDED JUNE 30, PERIOD ENDED PERIOD ENDED
----------------------- APRIL 30, 1995 APRIL 30, 1995
1993(2) 1994 (UNAUDITED)(3) (UNAUDITED)(4)
-------- -------- -------------- --------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
period............................ $ 1.0000 $ .9999 $ .9993 $ 1.0000
-------- -------- ----------- -----------
Investment Operations:
Investment income -- net............ .0297 .0333 .0412 .0154
Net realized (loss) on
investments....................... (.0001) (.0006) (.0059) (.0006)
-------- -------- ----------- -----------
Total from Investment
Operations................... .0296 .0327 .0353 .0148
-------- -------- ----------- -----------
Distributions:
Dividends from investment
income -- net..................... (.0297) (.0333) (.0412) (.0154)
-------- -------- ----------- -----------
Increase due to voluntary capital
contribution from Investment
Adviser........................... -- -- .0060 --
-------- -------- ----------- -----------
Net asset value, end of period...... $ .9999 $ .9993 $ .9994 $ .9994
======== ======== ========== ==========

TOTAL INVESTMENT RETURN.................. 3.25%(5) 3.38% 4.20%(6)(7) 1.55%(7)

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets............................ .05%(5) .31% .35%(5) .60%(5)
Ratio of net investment income to
average net assets................ 3.19%(5) 3.33% 4.94%(5) 5.47%(5)
Decrease reflected in above expense
ratios due to undertakings........ .51%(5) .12% .09%(5) .11%(5)
Net Assets, end of period (000's
omitted).......................... $175,713 $243,820 $317,004 $ 1,595
</TABLE>

- ---------------
(1) On January 17, 1995, all of the assets and liabilities of First Prairie Cash
Management were transferred to the Cash Management Fund in exchange for
Institutional Shares of the Cash Management Fund. The financial data
provided above prior to such date is for First Prairie Cash Management.

(2) From July 30, 1992 (commencement of operations) to June 30, 1993.

(3) From July 1, 1994 through April 30, 1995.

(4) From January 17, 1995 (initial offering date of Service Shares) through
April 30, 1995.

(5) Annualized.

(6) Had the Fund not had a capital contribution from the Investment Adviser
during the period, the total investment return would have been lower.

(7) Not annualized.

5
<PAGE> 7

U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND(1)

<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
------------------------------------------ SERVICE SHARES
11-MONTH --------------
YEAR ENDED MAY 31, PERIOD ENDED PERIOD ENDED
----------------------- APRIL 30, 1995 APRIL 30, 1995
1993(2) 1994 (UNAUDITED)(3) (UNAUDITED)(4)
-------- -------- -------------- --------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
period............................ $ 1.0000 $ 1.0000 $ .9999 $ 1.0000
-------- -------- -------------- --------------
Investment Operations:
Investment income -- net............ .0319 .0302 .0440 .0153
--------
Net realized (loss) on
investments....................... -- (.0001) (.0009) (.0010)
-------- -------- -------------- --------------
Total from Investment
Operations................... .0319 .0301 .0431 .0143
-------- -------- -------------- --------------

Distributions:
Dividends from investment
income -- net..................... (.0319) (.0302) (.0440) (.0153)
-------- -------- -------------- --------------
Net asset value, end of period...... $ 1.0000 $ .9999 $ .9990 $ .9990
======== ======== ========== ==========

TOTAL INVESTMENT RETURN.................. 3.25%(5) 3.06% 4.52%(6) 1.54%(6)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets............................ .02%(5) .30% .35%(5) .60%(5)
Ratio of net investment income to
average net assets................ 3.10%(5) 3.02% 4.85%(5) 5.43%(5)
Decrease reflected in above expense
ratios due to undertakings........ .47%(5) .11% .06%(5) .08%(5)
Net Assets, end of period (000's
omitted).......................... $264,527 $413,634 $504,850 $ 10,232
</TABLE>

- ---------------

(1) On January 17, 1995, all of the assets and liabilities of First Prairie U.S.
Treasury Securities Cash Management were transferred to the U.S. Government
Securities Cash Management Fund in exchange for Institutional Shares of the
U.S. Government Securities Cash Management Fund. The financial data provided
above prior to such date is for First Prairie U.S. Treasury Securities Cash
Management.
(2) From June 2, 1992 (commencement of operations) to May 31, 1993.
(3) From June 1, 1994 through April 30, 1995.
(4) From January 17, 1995 (initial offering date of Service Shares) through
April 30, 1995.
(5) Annualized.
(6) Not annualized.

6
<PAGE> 8

TREASURY PRIME CASH MANAGEMENT FUND

<TABLE>
<CAPTION>
PERIOD ENDED APRIL 30, 1995
(UNAUDITED)(1)
-----------------------------------------
INSTITUTIONAL SHARES SERVICE SHARES
-------------------- --------------
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.................... $ 1.0000 $ 1.0000
-------- -----------
Investment Operations:
Investment income -- net................................ .0058 .0055
Net realized (loss) on investments...................... (.0001) (.0001)
-------- -----------
Total from Investment Operations................... .0057 .0054
-------- -----------

Distributions:
Dividends from investment income-net.................... (.0058) (.0055)
-------- -----------
Net asset value, end of period.......................... $ .9999 $ .9999
======== ==========

TOTAL INVESTMENT RETURN...................................... .58%(2) .55%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. .35%(3) .60%(3)
Ratio of net investment income to average net assets.... 5.31%(3) 5.01%(3)
Decrease reflected in above expense ratios due to
undertakings.......................................... .98%(3) .98%(3)
Net Assets, end of period (000's omitted)............... $ 13,010 $ 553
</TABLE>

- ---------------

(1) From March 22, 1995 (commencement of operations) through April 30, 1995.
(2) Not annualized.
(3) Annualized.

7
<PAGE> 9

YIELD INFORMATION

From time to time, each Fund will advertise its yield and effective yield.
Both yield figures are based on historical earnings and are not intended to
indicate future performance. It can be expected that these yields will fluctuate
substantially. The yield of a Fund refers to the income generated by an
investment in the Fund over a seven-day period (which period will be stated in
the advertisement). This income is then annualized. That is, the amount of
income generated by the investment during that week is assumed to be generated
each week over a 52-week period and is shown as a percentage of the investment.
The effective yield is calculated similarly, but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the compounding effect
of this assumed reinvestment. Each Fund's yield and effective yield may reflect
absorbed expenses pursuant to any undertaking that may be in effect. See
"Management of the Trust." Both yield figures also take into account any
applicable distribution and service fees. As a result, at any given time, the
performance of the Service Class should be expected to be lower than that of the
Institutional Class. See "Service Plan."

Tax equivalent yield for the Municipal Cash Management Fund is calculated
by determining the pre-tax yield which, after being taxed at a stated rate,
would be equivalent to a stated yield or effective yield calculated as described
above.

Yield information is useful in reviewing a Fund's performance, but because
yields will fluctuate, under certain conditions such information may not provide
a basis for comparison with domestic bank deposits, other investments which pay
a fixed yield for a stated period of time, or other investment companies which
may use a different method of computing yield.

Comparative performance information may be used from time to time in
advertising or marketing Fund shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitor(TM), N. Palm Beach, Fla. 33408, IBC/Donoghue's
Money Fund Report(R) and other industry publications.

DESCRIPTION OF THE FUNDS

GENERAL

The Trust is a "series fund," which is a mutual fund divided into separate
portfolios. Each portfolio is treated as a separate entity for certain matters
under the Investment Company Act of 1940, as amended (the "1940 Act"), and for
other purposes, and a shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. As described below, for certain matters
Trust shareholders vote together as a group; as to others they vote separately
by Fund.

By this Prospectus, two classes of shares of each Fund are being
offered -- Institutional Shares and Service Shares (each such class being
referred to as a "Class"). The Classes are identical, except that Service Shares
are subject to an annual distribution and service fee at the rate of .25% of the
value of the average daily net assets of the Service Class. The fee is payable
to the Distributor for advertising, marketing and distributing Service Shares
and for ongoing personal services to the holders of Service Shares relating to
shareholder accounts and services related to the maintenance of such shareholder
accounts pursuant to a Service Plan adopted in accordance with Rule 12b-1 under
the 1940 Act. The Distributor may make payments to certain financial
institutions, securities dealers and other industry professionals (collectively,
"Service Agents") in respect of these services. See "Service Plan." The
distribution

8
<PAGE> 10

and service fee paid by the Service Class will cause such Class to have a higher
expense ratio and to pay lower dividends than the Institutional Class.

WHEN USED IN THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION,
THE TERMS "INVESTOR" AND "SHAREHOLDER" REFER TO THE INSTITUTION PURCHASING FUND
SHARES AND DO NOT REFER TO ANY INDIVIDUAL OR ENTITY FOR WHOSE ACCOUNT THE
INSTITUTION MAY PURCHASE FUND SHARES. Such institutions have agreed to transmit
copies of this Prospectus and all relevant Fund materials, including proxy
materials, to each individual or entity for whose account the institution
purchases Fund shares, to the extent required by law.

INVESTMENT OBJECTIVE

Each Fund's goal is to provide investors with as high a level of current
income as is consistent with the preservation of capital and the maintenance of
liquidity, and, in the case of the Municipal Cash Management Fund, exempt from
Federal income tax. Each Fund's investment objective cannot be changed without
approval by the holders of a majority (as defined in the 1940 Act) of such
Fund's outstanding voting shares. There can be no assurance that the Fund's
investment objective will be achieved. Securities in which the Funds invest may
not earn as high a level of current income as long-term or lower quality
securities which generally have less liquidity, greater market risk and more
fluctuation in market value.

MANAGEMENT POLICIES

Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Trust uses the amortized cost method of
valuing each Fund's securities pursuant to Rule 2a-7 under the 1940 Act, certain
requirements of which are summarized below.

In accordance with Rule 2a-7, each Fund is required to maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of 13 months or less and invest only in
U.S. dollar denominated securities determined in accordance with procedures
established by the Board of Trustees to present minimal credit risks and, in the
case of the Cash Management Fund and Municipal Cash Management Fund, which are
rated in one of the two highest rating categories for debt obligations by at
least two nationally recognized statistical rating organizations (or one rating
organization if the instrument was rated by only one such organization) or, if
unrated, are of comparable quality as determined in accordance with procedures
established by the Board of Trustees. The Cash Management Fund and Municipal
Cash Management Fund will purchase only instruments so rated in the highest
rating category or, if unrated, of comparable quality as determined in
accordance with procedures established by the Board of Trustees. The nationally
recognized statistical rating organizations currently rating instruments of the
type the Cash Management Fund and Municipal Cash Management Fund may purchase
are Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation
("S&P"), Duff & Phelps Credit Rating Co., Fitch Investors Service, Inc.
("Fitch"), IBCA Limited and IBCA Inc., and Thomson BankWatch, Inc. and their
rating criteria are described in the Appendix to the Statement of Additional
Information. For further information regarding the amortized cost method of
valuing securities, see "Determination of Net Asset Value" in the Statement of
Additional Information. There can be no assurance that each Fund will be able to
maintain a stable net asset value of $1.00 per share.

- CASH MANAGEMENT FUND invests in short-term money market obligations,
including securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities, certificates of deposit, time deposits, bankers'
acceptances and other short-term obligations issued by domestic banks, foreign
branches of domestic banks, foreign subsidiaries of domestic banks, domestic and
foreign branches of foreign banks and thrift institutions, repurchase

9
<PAGE> 11

agreements, and high quality domestic and foreign commercial paper and other
short-term corporate obligations, including those with floating or variable
rates of interest. See "Appendix -- Portfolio Securities." In addition, the Fund
is permitted to lend portfolio securities to the extent described under
"Appendix -- Investment Practices." During normal market conditions, at least
25% of the Fund's total assets will be invested in bank obligations.

The Fund will not invest more than 5% of its total assets in the securities
(including the securities collateralizing a repurchase agreement) of, or subject
to puts issued by, a single issuer, except that (i) the Fund may invest more
than 5% of its total assets in a single issuer for a period of up to three
business days in certain limited circumstances, (ii) the Fund may invest in
obligations issued or guaranteed by the U.S. Government without any such
limitation, and (iii) the limitation with respect to puts does not apply to
unconditional puts if no more than 10% of the Fund's total assets is invested in
securities issued or guaranteed by the issuer of the unconditional put. As to
each security, these percentages are measured at the time the Fund purchases the
security.

- MUNICIPAL CASH MANAGEMENT FUND invests at least 80% of the value of its
net assets (except when maintaining a temporary defensive position) in Municipal
Obligations. Municipal Obligations are debt obligations issued by states,
territories and possessions of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities, or multi-state
agencies or authorities, the interest from which is, in the opinion of bond
counsel to the issuer, exempt from Federal income tax. See
"Appendix -- Portfolio Securities."

From time to time, the Fund may invest more than 25% of the value of its
total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended (the
"Code"), issued after August 7, 1986, while exempt from Federal income tax, is a
preference item for the purpose of the alternative minimum tax. Where a
regulated investment company receives such interest, a proportionate share of
any exempt-interest dividend paid by the investment company may be treated as
such a preference item to the shareholder. The Fund may invest without
limitation in such Municipal Obligations if the Investment Adviser determines
that their purchase is consistent with the Fund's investment objective. See
"Risk Factors -- Fixed-Income Securities" below.

From time to time, on a temporary basis other than for temporary defensive
purposes (but not to exceed 20% of the value of the Fund's net assets) or for
temporary defensive purposes, the Fund may invest in taxable money market
instruments of the type in which the Cash Management Fund may invest. Dividends
paid by the Fund that are attributable to income earned by it from these
securities will be taxable to investors. See "Dividends, Distributions and
Taxes." If the Fund purchases taxable money market instruments the Trust will
value them using the amortized cost method and comply with the provisions of
Rule 2a-7 relating to purchases of taxable instruments. Under normal market
conditions, the Trust anticipates that not more than 5% of the value of the
Fund's total assets will be invested in any one category of these securities.
See "Appendix -- Portfolio Securities."

- TREASURY PRIME CASH MANAGEMENT FUND invests only in securities issued and
guaranteed as to principal and interest by the U.S. Government. These securities
include U.S. Treasury securities, which differ in their interest rates,
maturities and times of issuance. See "Appendix -- Portfolio Securities." The
Fund does not invest in repurchase agreements, securities issued by agencies or
instrumentalities of the Federal government or any other type of money market
instrument or security.

- U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND invests only in
short-term securities issued or guaranteed as to principal or interest by the
U.S. Government, its agencies or instrumentalities and may enter into

10
<PAGE> 12

repurchase agreements. See "Appendix -- Portfolio Securities." The Fund also may
lend securities from its portfolio as described under "Appendix -- Investment
Practices."

CERTAIN FUNDAMENTAL POLICIES

Each Fund may (i) invest up to 25% of the value of its total assets in the
securities of issuers in a single industry, provided there is no limitation on
the purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or, in the case of the Municipal Cash Management
Fund, Municipal Obligations; and (ii) pledge, hypothecate, mortgage or otherwise
encumber its assets, but only to secure permitted borrowings (this policy,
however, is not fundamental in the case of the Municipal Cash Management Fund
and Treasury Prime Cash Management Fund). In addition, (i) each of the Municipal
Cash Management Fund and Treasury Prime Cash Management Fund may borrow money to
the extent permitted under the 1940 Act, which currently limits borrowing to no
more than 33 1/3% of the value of the Fund's total assets; (ii) each of the Cash
Management Fund and U.S. Government Securities Cash Management Fund may borrow
money from banks, but only for temporary or emergency (not leveraging) purposes,
in an amount up to 15% of the value of the Fund's total assets (including the
amount borrowed) valued at the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the value of the Fund's total assets, the Fund will not
make any additional investments; (iii) each of the Cash Management Fund and
Municipal Cash Management Fund may invest up to 5% of its total assets in the
obligations of any one issuer, except that up to 25% of the value of the Fund's
total assets may be invested (subject to the provisions of Rule 2a-7), and
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities may be purchased, without regard to any such limitation; and
(iv) the Cash Management Fund will invest, except when it has adopted a
temporary defensive position, at least 25% of its total assets in securities
issued by banks, including foreign banks and branches. This paragraph describes,
except as noted, fundamental policies that cannot be changed as to a Fund
without approval by the holders of a majority (as defined in the 1940 Act) of
such Fund's outstanding voting shares. See "Investment Objective and Management
Policies -- Investment Restrictions" in the Statement of Additional Information.

CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICY

Each Fund may invest up to 10% of the value of its net assets in illiquid
securities. See "Appendix -- Investment Practices -- Illiquid Securities" and
"Investment Objective and Management Policies -- Investment Restrictions" in the
Statement of Additional Information.

RISK FACTORS

See also the Appendix beginning on page A-1.

FOREIGN SECURITIES -- (CASH MANAGEMENT FUND) Since the Cash Management Fund's
portfolio may contain securities issued by foreign branches of domestic and
foreign banks, domestic and foreign branches of foreign banks and thrift
institutions, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to such securities that are
different in some respects from those incurred by a fund which invests only in
debt obligations of U.S. domestic issuers, although such obligations may be
higher yielding when compared to the securities of U.S. domestic issuers. Such
risks include possible future political and economic developments, the possible
imposition of foreign withholding taxes on interest income payable on the
securities, the possible establishment of exchange controls or the adoption of
other foreign governmental restrictions which might adversely affect the payment
of principal and interest on these securities and the possible seizure or
nationalization of foreign deposits.

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<PAGE> 13

FIXED-INCOME SECURITIES -- (MUNICIPAL CASH MANAGEMENT FUND) Certain provisions
in the Code relating to the issuance of Municipal Obligations may reduce the
volume of Municipal Obligations qualifying for Federal tax exemption. One effect
of these provisions could be to increase the cost of the Municipal Obligations
available for purchase by the Fund and thus reduce the available yield.
Shareholders of the Municipal Cash Management Fund should consult their tax
advisers concerning the effect of these provisions on an investment in the Fund.
Proposals that may restrict or eliminate the income tax exemption for interest
on Municipal Obligations may be introduced in the future. If any such proposal
were enacted that would reduce the availability of Municipal Obligations for
investment by the Fund so as to adversely affect the Fund's shareholders, the
Trust would reevaluate the Fund's investment objective and policies and submit
possible changes in the Fund's structure to shareholders for their
consideration. If legislation were enacted that would treat a type of Municipal
Obligation as taxable, the Trust would treat such security as a permissible
taxable investment within the applicable limits set forth herein.

The Municipal Cash Management Fund may invest more than 25% of the value of
its total assets in Municipal Obligations which are related in such a way that
an economic, business or political development or change affecting one such
security also would affect the other securities; for example, securities the
interest upon which is paid from revenues of similar types of projects, or
securities of issuers that are located in the same state. As a result, the Fund
may be subject to greater risk as compared to a fund that does not follow this
practice.

Certain municipal lease/purchase obligations in which the Municipal Cash
Management Fund may invest may contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease payments in future years
unless money is appropriated for such purpose on a yearly basis. Although "non-
appropriation" lease/purchase obligations are secured by the leased property,
disposition of the leased property in the event of foreclosure might prove
difficult. In evaluating the credit quality of a municipal lease/purchase
obligation that is unrated, the Investment Adviser will consider, on an ongoing
basis, a number of factors including the likelihood that the issuing
municipality will discontinue appropriating funding for the leased property.

OTHER INVESTMENT CONSIDERATIONS -- Each Fund will attempt to increase yields by
trading to take advantage of short-term market variations. This policy is
expected to result in high portfolio turnover but should not adversely affect
the Funds since each Fund usually will not pay brokerage commissions on
purchases of short-term debt obligations, including U.S. Government securities.
The value of the securities held by each Fund will vary inversely to changes in
prevailing interest rates. Thus, if interest rates have increased from the time
a security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price greater
than its purchase cost. In either instance, if the security is held to maturity,
no gain or loss will be realized.

Each Fund may purchase securities on a when-issued basis, which means that
the price is fixed at the time of commitment, but delivery and payment
ordinarily take place a number of days after the date of the commitment to
purchase. The Fund will make commitments to purchase such securities only with
the intention of actually acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed advisable, although any
gain realized on such sale would be taxable. The Fund will not accrue income in
respect of a when-issued security prior to its stated delivery date. No
additional when-issued commitments will be made by the Municipal Cash Management
Fund if more than 20% of the value of such Fund's net assets would be so
committed.

Securities purchased on a when-issued basis and certain other securities
held in the Fund's portfolio are subject to changes in value (both generally
changing in the same way, i.e., appreciating when interest rates decline and
depreciating when interest rates rise) based upon the public's perception of the
creditworthiness of the issuer and changes, real or anticipated, in the level of
interest rates. Securities purchased on a when-issued basis may expose the

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<PAGE> 14

Fund to risk because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued basis can involve the
additional risk that the yield available in the market when the delivery takes
place actually may be higher than that obtained in the transaction itself. A
segregated account of the Fund consisting of cash, cash equivalents or U.S.
Government securities or other high quality liquid debt securities at least
equal at all times to the amount of the when-issued commitments will be
established and maintained at the Trust's custodian bank. Purchasing securities
on a when-issued basis when the Fund is fully or almost fully invested may
result in greater potential fluctuation in the value of the Fund's net assets
and its net asset value per share.

Investment decisions for each Fund are made independently from those of
other investment companies or investment advisory accounts that may be advised
by the Investment Adviser. However, if such other investment companies or
managed accounts are prepared to invest in, or desire to dispose of, securities
of the type in which a Fund may invest at the same time as such Fund, available
investments or opportunities for sales will be allocated equitably to each of
them. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or received
by the Fund.

MANAGEMENT OF THE TRUST

INVESTMENT ADVISER AND ADMINISTRATOR

First Chicago Investment Management Company, located at Three First
National Plaza, Chicago, Illinois 60670, is each Fund's investment adviser and
administrator. FCIMCO is a newly-formed, registered investment adviser and a
wholly-owned subsidiary of The First National Bank of Chicago ("FNBC"), which in
turn is a wholly-owned subsidiary of First Chicago Corporation, a registered
bank holding company. FNBC is a commercial bank offering a wide range of banking
and investment services to customers throughout the United States and around the
world. As of March 31, 1995, FNBC was one of the largest commercial banks in the
United States and the largest in the mid-western United States in terms of
assets ($72.3 billion) and deposits ($32.2 billion). As of March 31, 1995,
FCIMCO provided investment management services to portfolios containing
approximately $26 billion in assets. FCIMCO serves as investment adviser for the
Trust pursuant to an Investment Advisory Agreement dated as of January 1, 1995.
Prior to January 1, 1995, FNBC served as each Fund's investment adviser and
administrator. Under the Investment Advisory Agreement, FCIMCO provides the
day-to-day management of each Fund's investments, subject to the overall
authority of the Trust's Board of Trustees and in conformity with Massachusetts
law and the stated policies of the Trust. FCIMCO is responsible for making
investment decisions for the Trust, placing purchase and sale orders (which may
be allocated to various dealers based on their sales of Fund shares) and
providing research, statistical analysis and continuous supervision of each
Fund's investment portfolio. FCIMCO has advised the Trust that in making its
investment decisions FCIMCO does not obtain or use material inside information
in its or any of its affiliate's possession.

Under the terms of the Investment Advisory Agreement with the Trust, the
Trust has agreed to pay FCIMCO a monthly advisory fee at the annual rate of .20
of 1% of the value of each Fund's average daily net assets.

FCIMCO serves as the Trust's administrator pursuant to an Administration
Agreement with the Trust. Under the Administration Agreement, FCIMCO generally
assists in all aspects of the Trust's operations, other than providing
investment advice, subject to the overall authority of the Trust's Board in
accordance with Massachusetts law. Under the terms of the Administration
Agreement, the Trust has agreed to pay FCIMCO a monthly administration fee at
the annual rate of .15 of 1% of the value of each Fund's average daily net
assets. FCIMCO has engaged Concord Holding Corporation, a wholly-owned
subsidiary of The BISYS Group, Inc., located at 125 West 55th Street, New York,
New

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<PAGE> 15

York 10019 (the "Sub-Administrator"), to assist it in providing certain
administrative services for the Trust pursuant to a Master Sub-Administration
Agreement between FCIMCO and the Sub-Administrator. The Sub-Administrator
currently provides administrative services or sub-administrative services to
other investment companies with over $35 billion in assets. FCIMCO, from its own
funds, will pay the Sub-Administrator for the Sub-Administrator's services.

DISTRIBUTOR

Concord Financial Group, Inc. (the "Distributor"), located at 125 West 55th
Street, New York, New York 10019, serves as the Trust's principal underwriter
and distributor of the Funds' shares. The Distributor, a wholly-owned subsidiary
of the Sub-Administrator, was organized to distribute shares of mutual funds to
institutional and retail investors. The Distributor distributes the shares of
other investment companies with over $21 billion in assets.

TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN

Primary Funds Service Corp., 100 Financial Park, Franklin, Massachusetts
02038, is the Trust's Transfer and Dividend Disbursing Agent (the "Transfer
Agent"). The Transfer Agent is jointly owned by a subsidiary of the
Sub-Administrator and Putnam Investments, Inc. The Bank of New York, 90
Washington Street, New York, New York 10286, is the Trust's Custodian.

EXPENSES

All expenses incurred in the operation of the Trust are borne by the Trust,
except to the extent specifically assumed by FCIMCO. The expenses borne by the
Trust include: organizational costs, taxes, interest, brokerage fees and
commissions, if any, fees of Trustees who are not officers, directors, employees
or holders of 5% or more of the outstanding voting securities of FCIMCO,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing agents'
fees, certain insurance premiums, industry association fees, outside auditing
and legal expenses, costs of maintaining the Trust's existence, costs of
independent pricing services, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
shareholders' reports and meetings, costs of preparing and printing prospectuses
and statements of additional information for regulatory purposes and for
distribution to existing shareholders, and any extraordinary expenses. In
addition, Service Shares are subject to an annual distribution and service fee
pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act. See
"Service Plan." Expenses attributable to a particular Fund or Class are charged
against the assets of that Fund or Class, respectively; other expenses of the
Trust are allocated among the Funds on the basis determined by the Board of
Trustees, including, but not limited to, proportionately in relation to the net
assets of each Fund.

FCIMCO has undertaken, as to each Fund, until such time as it gives
investors at least 90 days' notice to the contrary, that if, in any fiscal year
the aggregate expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the investment advisory and
administration fees, exceed .35% and .60% of the value of the average net assets
of the Institutional Class and the Service Class, respectively, for the fiscal
year, the Trust may deduct from the payment to be made to FCIMCO under the
Investment Advisory or Administration Agreements, or FCIMCO will bear, such
excess expense.

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<PAGE> 16

HOW TO BUY FUND SHARES

Each Fund is designed for institutional investors, including banks (such as
FNBC), acting for themselves or in a fiduciary, advisory, agency, custodial or
similar capacity, public agencies and municipalities. Fund shares may not be
purchased directly by individuals, although institutions may purchase shares for
accounts maintained by individuals. Generally, each investor will be required to
open a single master account with the Fund for all purposes. In certain cases,
the Trust may request investors to maintain separate master accounts for shares
held by the investor (i) for its own account, for the account of other
institutions and for accounts for which the institution acts as a fiduciary, and
(ii) for accounts for which the investor acts in some other capacity. An
institution may arrange with the Transfer Agent for sub-accounting services and
will be charged directly for the cost of such services. Certain accounts may be
eligible for an automatic investment privilege, commonly called a "sweep," under
which amounts in excess of a certain minimum held in those accounts will be
invested automatically in shares at pre-determined intervals. Each investor
desiring to use this privilege should consult its bank for details.

The minimum initial investment is $1,000,000 or any lesser amount if, in
the Distributor's opinion, the investor has adequate intent and availability of
funds to reach a future level of investment of $1,000,000. There is no minimum
for subsequent purchases. The initial investment must be accompanied by the
Account Application. The Trust does not impose any sales charges in connection
with purchases of Fund shares, although Service Agents and other institutions
may charge their clients fees in connection with purchases for the accounts of
their clients. These fees would be in addition to any amounts which might be
received under the Service Plan. Service Agents may receive different levels of
compensation for selling different classes of shares. Each Service Agent has
agreed to transmit to its clients a schedule of such fees. The Fund does not
issue share certificates. The Trust reserves the right to reject any purchase
order. It is not recommended that the Municipal Cash Management Fund be used as
a vehicle for Keogh, IRA or other qualified retirement plans.

Fund shares may be purchased by wire, by telephone or through compatible
computer facilities. All payments should be made in U.S. dollars and, to avoid
fees and delays, should be drawn only on U.S. banks. Investors may telephone
orders for purchases of Fund shares by calling 1-800-370-9446. For instructions
concerning purchases and to determine whether their computer facilities are
compatible with the Trust's, investors should call 1-800-370-9446.

Fund shares are sold on a continuous basis at the net asset value per share
next determined after an order in proper form and Federal Funds (monies of
member banks in the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received by the Transfer Agent. If an investor does
not remit Federal Funds, its payment must be converted into Federal Funds. This
usually occurs within one business day of receipt of a bank wire and within two
business days of receipt of a check drawn on a member bank of the Federal
Reserve System. Checks drawn on banks which are not members of the Federal
Reserve System may take considerably longer to convert into Federal Funds. Prior
to receipt of Federal Funds, the investor's money will not be invested.

Net asset value per share is determined as of 12:00 noon, Central time, for
the Municipal Cash Management Fund and Treasury Prime Cash Management Fund and
2:00 p.m., Central time, for the Cash Management Fund and U.S. Government
Securities Cash Management Fund, on each Fund business day (which, as used
herein, shall include each day that the New York Stock Exchange is open for
business, except Martin Luther King, Jr. Day, Columbus Day and Veterans Day).
Net asset value per share of each Class is computed by dividing the value of the
Fund's net assets represented by such Class (i.e., the value of its assets less
liabilities) by the total number of shares of such Class outstanding. See
"Determination of Net Asset Value" in the Statement of Additional Information.

Investors whose payments are received in or converted into Federal Funds by
12:00 noon, Central time, for the Municipal Cash Management Fund and Treasury
Prime Cash Management Fund or 2:00 p.m., Central time, for the

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<PAGE> 17

Cash Management Fund and U.S. Government Securities Cash Management Fund, by the
Transfer Agent will receive the dividend declared that day. Investors whose
payments are received in or converted into Federal Funds by the Transfer Agent
after 12:00 noon, Central time, for the Municipal Cash Management Fund and
Treasury Prime Cash Management Fund or 2:00 p.m., Central time, for the Cash
Management Fund and U.S. Government Securities Cash Management Fund, will begin
to accrue dividends on the following business day.

Federal Regulations require that an investor provide a certified Taxpayer
Identification Number ("TIN") upon opening or reopening an account. See
"Dividends, Distributions and Taxes" and the Account Application for further
information concerning this requirement. Failure to furnish a certified TIN to
the Trust could subject an investor to a $50 penalty imposed by the Internal
Revenue Service (the "IRS").

HOW TO REDEEM FUND SHARES

An investor may redeem all or any portion of the shares in the investor's
account on any Fund business day at the net asset value next determined after a
redemption request in proper form is received by the Transfer Agent. Therefore,
redemptions will be effected on the same day the redemption order is received
only if such order is received prior to 12:00 noon, Central time, for the
Municipal Cash Management Fund and Treasury Prime Cash Management Fund or 2:00
p.m., Central time, for the Cash Management Fund and U.S. Government Securities
Cash Management Fund, on any Fund business day. Shares that are redeemed earn
dividends up to and including the day prior to the day the redemption is
effected. The proceeds of a redemption will be paid in Federal Funds ordinarily
on the Fund business day the redemption is effected, but in any event within
seven days. Payment for redemption requests received before 12:00 noon, Central
time, for the Municipal Cash Management Fund and Treasury Prime Cash Management
Fund or 2:00 p.m., Central time, for the Cash Management Fund and U.S.
Government Securities Cash Management Fund, ordinarily is made in Federal Funds
wired to the redeeming shareholder on the same Fund business day. Payment for
redeemed shares for which a redemption order is received after such time on a
Fund business day is made in Federal Funds wired to the redeeming shareholder on
the next Fund business day following redemption. To allow the Investment Adviser
to manage the Funds' portfolios more effectively, investors are urged to make
redemption requests as early in the day as possible. In making redemption
requests, the names of the registered shareholders and their account numbers
must be supplied. Although each Fund generally retains the right to pay the
redemption price of its shares in kind with securities (instead of cash), the
Trust has filed an election under Rule 18f-1 under the 1940 Act committing to
pay in cash all redemptions by a shareholder of record up to the amounts
specified in such rule (in most cases approximately $250,000).

A wire redemption may be requested by telephone or wire to Primary Funds
Service Corp., P.O. Box 9743, Boston, Massachusetts 02109. For telephone
redemptions, please call 1-800-370-9446.

An investor may redeem shares by telephone if the investor has checked the
appropriate box on the Account Application. By selecting a telephone redemption
privilege, an investor authorizes the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be an authorized
representative of the investor and reasonably believed by the Transfer Agent to
be genuine. The Trust will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Trust
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Trust nor the Transfer Agent will be liable
for following telephone instructions reasonably believed to be genuine.

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<PAGE> 18

The Trust makes available to institutions the ability to redeem shares
through compatible computer facilities. Investors desiring to redeem shares in
this manner should call 1-800-370-9446 to determine whether their computer
facilities are compatible and to receive instructions for redeeming shares in
this manner.

The right of any investor to receive payments with respect to any
redemption may be suspended or the payment of the redemption proceeds postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on such Exchange is restricted or, to the
extent otherwise permitted by the 1940 Act, if an emergency exists.

SERVICE PLAN

(Service Shares Only)

Service Shares are subject to a Service Plan adopted pursuant to Rule 12b-1
under the 1940 Act. Under the Service Plan, each Fund pays the Distributor for
advertising, marketing and distributing the Fund's Service Shares and for the
provision of certain services to the holders of Service Shares a fee at the
annual rate of .25 of 1% of the value of the average daily net assets of the
Service Class. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the Fund
and providing reports and other information, and services related to the
maintenance of such shareholder accounts. The fee payable for such services is
intended to be a "service fee" as defined in Article III, Section 26 of the NASD
Rules of Fair Practice. Under the Service Plan, the Distributor may make
payments to Service Agents in respect of these services. FCIMCO, FNBC and their
affiliates may act as Service Agents and receive fees under the Service Plan.
The Distributor determines the amounts to be paid to Service Agents. Each
Service Agent is required to disclose to its clients any compensation payable to
it by the Fund pursuant to the Service Plan and any other compensation payable
by their clients in connection with the investment of their assets in Fund
shares. From time to time, the Distributor may defer or waive receipt of fees
under the Service Plan while retaining the ability to be paid by the Fund under
the Service Plan thereafter. The fees payable to the Distributor under the
Service Plan for advertising, marketing and distributing Service Shares and for
payments to Service Agents are payable without regard to actual expenses
incurred.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Fund ordinarily declares dividends from net investment income on each
Fund business day. Fund shares begin earning income dividends on the day the
purchase order is effective. Dividends usually are paid on the last calendar day
of each month, and are automatically reinvested in additional shares of the Fund
from which they were paid at net asset value or, at the investor's option, paid
in cash. Each Fund's earnings for Saturdays, Sundays and holidays are declared
as dividends on the preceding business day. If an investor redeems all shares in
its account at any time during the month, all dividends to which the investor is
entitled will be paid along with the proceeds of the redemption. Distributions
from net realized securities gains, if any, generally are declared and paid once
a year, but a Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. No Fund will make distributions
from net realized securities gains unless capital loss carryovers, if any, have
been utilized or have expired. Investors may choose whether to receive
distributions in cash or to reinvest in additional shares of the Fund from which
they were paid at net asset value. All expenses are accrued daily and deducted
before declaration of dividends to investors. Dividends paid by each Class will
be calculated at the same time and in the same manner and will be of the same
amount, except that the expenses attributable solely to the Institutional Class
or the Service Class will be borne exclusively by such

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<PAGE> 19

Class. Service Shares will receive lower per share dividends than Institutional
Shares because of the higher expenses borne by the Service Class. See "Annual
Fund Operating Expenses."

Dividends paid by the Cash Management, Treasury Prime Cash Management and
U.S. Government Securities Cash Management Funds derived from net investment
income and dividends paid by the Municipal Cash Management Fund derived from
taxable investments, together with distributions from any net realized short-
term securities gains and all or a portion of any gain realized from the sale or
other disposition of certain market discount bonds, will be taxable to U.S.
investors as ordinary income whether or not reinvested in additional Fund
shares. Distributions from net realized long-term securities gains, if any, will
be taxable as long-term capital gains for Federal income tax purposes if the
beneficial holder of Fund shares is a citizen or resident of the United States,
regardless of how long investors have held shares and whether such distributions
are received in cash or reinvested in additional shares.

Except for dividends from taxable investments, the Trust anticipates that
substantially all dividends paid by the Municipal Cash Management Fund will not
be subject to Federal income tax. Dividends and distributions paid by the Fund
may be subject to certain state and local taxes. Although all or a substantial
portion of the dividends paid by the Municipal Cash Management Fund may be
excluded by shareholders of the Fund from their gross income for Federal income
tax purposes, the Fund may purchase specified private activity bonds, the
interest from which may be (i) a preference item for purposes of the alternative
minimum tax, (ii) a component of the "adjusted current earnings" preference item
for purposes of the corporate alternative minimum tax as well as a component in
computing the corporate environmental tax or (iii) a factor in determining the
extent to which the Social Security benefits of a beneficial holder of the
Fund's shares are taxable. If the Fund purchases such securities, the portion of
its dividends related thereto will not necessarily be tax exempt to a beneficial
holder of the Fund's shares who is subject to the alternative minimum tax and/or
tax on Social Security benefits and may cause such investor to be subject to
such taxes.

Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the Treasury Prime Cash Management
Fund currently are not subject to state personal income tax. The Trust intends
to provide shareholders of the Treasury Prime Cash Management Fund with a
statement which sets forth the percentage of dividends and distributions paid by
the Fund that is attributable to interest income from direct obligations of the
United States.

Dividends paid by a Fund derived from net investment income, together with
distributions from net realized short-term securities gains and all or a portion
of any gain realized from the sale or other disposition of certain market
discount bonds, paid by such Fund to a foreign investor who is the beneficial
owner of such Fund's shares generally are subject to U.S. nonresident
withholding taxes at the rate of 30%, unless the foreign investor claims the
benefit of a lower rate specified in a tax treaty. Distributions from net
realized long-term securities gains paid by the Fund to such foreign investor
generally will not be subject to U.S. nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described below, unless
the foreign investor certifies his non-U.S. residency status.

Federal regulations generally require the Trust to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and distributions
from net realized securities gains paid to a shareholder if such shareholder
fails to certify either that the TIN furnished in connection with opening an
account is correct, or that such shareholder has not received notice from the
IRS of being subject to backup withholding as a result of a failure to properly
report taxable dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Trust to institute backup withholding if the
IRS determines a shareholder's TIN is incorrect or if a shareholder has failed
to properly report taxable dividend and interest income on a Federal income tax
return.

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<PAGE> 20

A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the record owner's
Federal income tax return.

Notice as to the tax status of dividends and distributions will be mailed
to investors annually. Each investor also will receive periodic summaries of its
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. For the Municipal Cash
Management Fund, these statements will set forth the dollar amount of income
exempt from Federal tax and the dollar amount, if any, subject to Federal tax.
These dollar amounts will vary depending on the size and length of time of the
investor's investment in the Municipal Cash Management Fund. If the Municipal
Cash Management Fund pays dividends derived from taxable income, it intends to
designate as taxable the same percentage of the day's dividend as the actual
taxable income earned on that day bears to total income earned on that day.
Thus, the percentage of the dividend designated as taxable, if any, may vary
from day to day. No dividend will qualify for the dividends received deduction
allowable to certain U.S. corporations.

It is expected that each Fund will qualify as a "regulated investment
company" under the Code so long as such qualification is in the best interests
of its shareholders. Qualification as a regulated investment company relieves
the Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. Each Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable income and capital gains, if any.

Each investor and beneficial shareholder should consult its tax adviser
regarding questions as to Federal, state or local taxes.

GENERAL INFORMATION

The Trust was organized as an unincorporated business trust under the laws
of the Commonwealth of Massachusetts pursuant to an Agreement and Declaration of
Trust (the "Trust Agreement") dated October 19, 1994, and commenced operations
on January 17, 1995. The Trust is authorized to issue an unlimited number of
shares of beneficial interest, par value $.001 per share. Each Fund's shares are
classified into two classes. Each share has one vote and shareholders will vote
in the aggregate and not by class except as otherwise required by law or with
respect to any matter which affects only one class. Holders of Service Shares
only, however, will be entitled to vote on matters submitted to shareholders
pertaining to the Service Plan. Investors have agreed to vote Fund shares for
which they are the record owners according to voting instructions received from
the beneficial holder of such shares.

On January 17, 1995, all of the assets and liabilities of First Prairie
Cash Management and First Prairie U.S. Treasury Securities Cash Management were
transferred to the Cash Management Fund and U.S. Government Securities Cash
Management Fund, respectively, in exchange for Institutional Shares pursuant to
a proposal approved by shareholders of each such First Prairie fund on December
30, 1994.

To date, the Board of Trustees has authorized the creation of four separate
portfolios of shares. All consideration received by the Trust for shares of one
of the portfolios and all assets in which such consideration is invested will
belong to that portfolio (subject only to the rights of creditors of the Trust)
and will be subject to the liabilities related thereto. The income attributable
to, and the expenses of, one portfolio (and as to classes within a portfolio)
are treated separately from those of the other portfolios (and classes). The
Trust has the ability to create, from time to time, new portfolios without
shareholder approval.

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<PAGE> 21

Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an investment
company, such as the Trust, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each Fund affected by such matter. Rule 18f-2 further provides that a Fund shall
be deemed to be affected by a matter unless it is clear that the interests of
such Fund in the matter are identical or that the matter does not affect any
interest of such Fund. However, the Rule exempts the selection of independent
accountants and the election of Trustees from the separate voting requirements
of the Rule.

Under Massachusetts law, shareholders could, under certain circumstances,
be held liable for the obligations of the Trust. However, the Trust Agreement
disclaims shareholder liability for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or a Trustee. The Trust
Agreement provides for indemnification from the Trust's property for all losses
and expenses of any shareholder held personally liable for the obligations of
the Trust. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which the Trust itself
would be unable to meet its obligations, a possibility which management believes
is remote. Upon payment of any liability incurred by the Trust, the shareholder
paying such liability will be entitled to reimbursement from the general assets
of the Trust. The Trustees intend to conduct the operations of the Trust in such
a way so as to avoid, as far as possible, ultimate liability of the shareholders
for liabilities of the Trust. As described under "Management of the Trust" in
the Statement of Additional Information, the Trust ordinarily will not hold
shareholder meetings; however, shareholders under certain circumstances may have
the right to call a meeting of shareholders for the purpose of voting to remove
Trustees.

The Transfer Agent maintains a record of each investor's ownership and
sends confirmations and statements of account.

Investor inquiries may be made by writing to the Trust at the address shown
on the front cover or by calling the telephone number shown on the front cover.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE TRUST'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUNDS' SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.

20
<PAGE> 22

APPENDIX

PORTFOLIO SECURITIES

To the extent set forth in this Prospectus and except as noted below, each
Fund may invest in the following securities:

U.S. TREASURY SECURITIES -- Each Fund may invest in U.S. Treasury
securities which include Treasury Bills, Treasury Notes and Treasury Bonds that
differ in their interest rates, maturities and times of issuance. Treasury Bills
have initial maturities of one year or less; Treasury Notes have initial
maturities of one to ten years; and Treasury Bonds generally have initial
maturities of greater than ten years.

U.S. GOVERNMENT SECURITIES -- In addition to U.S. Treasury securities, each
Fund, except the Treasury Prime Cash Management Fund, may invest in securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal Home Loan
Banks, by the right of the issuer to borrow from the Treasury; others, such as
those issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations of the agency
or instrumentality; and others, such as those issued by the Student Loan
Marketing Association, only by the credit of the agency or instrumentality.
These securities bear fixed, floating or variable rates of interest. Interest
may fluctuate based on generally recognized reference rates or the relationship
of rates. While the U.S. Government provides financial support to such U.S.
Government-sponsored agencies or instrumentalities, no assurance can be given
that it will always do so, since it is not so obligated by law. Each Fund will
invest in such securities only when the Trust is satisfied that the credit risk
with respect to the issuer is minimal.

REPURCHASE AGREEMENTS -- Each Fund, except the Treasury Prime Cash
Management Fund, may enter into repurchase agreements, which involve the
acquisition by a Fund of an underlying debt instrument, subject to an obligation
of the seller to repurchase, and such Fund to resell, the instrument at a fixed
price usually not more than one week after its purchase. Certain costs may be
incurred by a Fund in connection with the sale of the securities if the seller
does not repurchase them in accordance with the repurchase agreement. In
addition, if bankruptcy proceedings are commenced with respect to the seller of
the securities, realization on the securities by the Fund may be delayed or
limited. Pursuant to an order obtained from the Securities and Exchange
Commission, each Fund also is permitted to enter into overnight repurchase
agreements with FNBC or an affiliate of FNBC subject to the terms and conditions
of such order.

BANK OBLIGATIONS -- The Cash Management Fund will, and, to a limited
extent, the Municipal Cash Management Fund may, invest in bank obligations,
including certificates of deposit, time deposits, bankers' acceptances and other
short-term obligations of domestic banks, foreign subsidiaries of domestic
banks, foreign branches of domestic banks, and domestic and foreign branches of
foreign banks and thrift institutions. Certificates of deposit are negotiable
certificates evidencing the obligation of a bank to repay funds deposited with
it for a specified period of time. Time deposits are non-negotiable deposits
maintained in a banking institution for a specified period of time at a stated
interest rate. Time deposits which may be held by the Fund will not benefit from
insurance from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation. Bankers' acceptances
are credit instruments evidencing the obligation of a bank to pay a draft drawn
on it by a customer. These instruments reflect the obligation both of the bank
and of the drawer to pay the face amount

A-1
<PAGE> 23

of the instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations, bearing fixed, floating or variable interest
rates.

COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS -- The Cash
Management Fund and, to a limited extent, the Municipal Cash Management Fund may
invest in commercial paper, which consists of short-term, unsecured promissory
notes issued to finance short-term credit needs. The commercial paper purchased
by these Funds will consist only of direct obligations issued by domestic and
foreign entities. The other corporate obligations in which these Funds may
invest consist of high quality, U.S. dollar denominated short-term bonds and
notes (including variable amount master demand notes) issued by domestic and
foreign corporations.

FLOATING AND VARIABLE RATE OBLIGATIONS -- The Cash Management Fund and the
Municipal Cash Management Fund also may purchase floating and variable rate
demand notes and bonds, which are obligations ordinarily having stated
maturities in excess of 13 months, but which permit the holder to demand payment
of principal at any time, or at specified intervals not exceeding 13 months, in
each case upon not more than 30 days' notice. Variable rate demand notes include
master demand notes which are obligations that permit the Fund to invest
fluctuating amounts, which may change daily without penalty, pursuant to direct
arrangements between the Fund, as lender, and the borrower. The interest rates
on these notes fluctuate from time to time. The issuer of such obligations
normally has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the obligations plus accrued
interest upon a specified number of days' notice to the holders of such
obligations. The interest rate on a floating rate demand obligation is based on
a known lending rate, such as a bank's prime rate, and is adjusted automatically
each time such rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals. Frequently, such
obligations are secured by letters of credit or other credit support
arrangements provided by banks. Because these obligations are direct lending
arrangements between the lender and borrower, it is not contemplated that such
instruments generally will be traded, and there generally is no established
secondary market for these obligations, although they are redeemable at face
value. Accordingly, where these obligations are not secured by letters of credit
or other credit support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. Such
obligations frequently are not rated by credit rating agencies and, if not so
rated, each of these Funds may invest in them only if the Investment Adviser
determines that at the time of investment the obligations are of comparable
quality to the other obligations in which the Fund may invest. The Investment
Adviser, on behalf of the Fund will consider on an ongoing basis the credit
worthiness of the issuers of the floating and variable rate demand obligations
held by the Fund. Neither of these Funds will invest more than 10% of the value
of its net assets in floating or variable rate demand obligations as to which it
cannot exercise the demand feature on not more than seven days' notice if there
is no secondary market available for these obligations, and in other securities
that are illiquid.

MUNICIPAL OBLIGATIONS -- The Municipal Cash Management Fund will invest in
Municipal Obligations. Municipal Obligations generally include debt obligations
issued to obtain funds for various public purposes as well as certain industrial
development bonds issued by or on behalf of public authorities. Municipal
Obligations are classified as general obligation bonds, revenue bonds and notes.
General obligation bonds are secured by the issuer's pledge of its faith, credit
and taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Industrial
development bonds, in most cases, are revenue bonds and generally do not carry
the pledge of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing municipalities or
agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Municipal Obligations include municipal
lease/purchase agreements which are similar to

A-2
<PAGE> 24

installment purchase contracts for property or equipment issued by
municipalities. Municipal Obligations bear fixed, floating or variable rates of
interest. Certain Municipal Obligations are subject to redemption at a date
earlier than their stated maturity pursuant to call options, which may be
separated from the related municipal obligation and purchased and sold
separately.

PARTICIPATION INTERESTS -- The Municipal Cash Management Fund may purchase
from financial institutions participation interests in Municipal Obligations
(such as industrial development bonds and municipal lease/purchase agreements).
A participation interest gives the Fund an undivided interest in the Municipal
Obligation in the proportion that the Fund's participation interest bears to the
total principal amount of the Municipal Obligation. These instruments may have
fixed, floating or variable rates of interest, with remaining maturities of 13
months or less. If the participation interest is unrated, or has been given a
rating below that which otherwise is permissible for purchase by the Fund, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank that the Board of Trustees has determined meets the
prescribed quality standards for banks set forth above, or the payment
obligation otherwise will be collateralized by U.S. Government securities. For
certain participation interests, the Fund will have the right to demand payment,
on not more than seven days' notice, for all or any part of the Fund's
participation interest in the Municipal Obligation, plus accrued interest. As to
these instruments, the Fund intends to exercise its right to demand payment only
upon a default under the terms of the Municipal Obligation, as needed to provide
liquidity to meet redemptions, or to maintain or improve the quality of its
investment portfolio. The Municipal Cash Management Fund will not invest more
than 10% of the value of its net assets in participation interests that do not
have this demand feature, and in other illiquid securities.

TENDER OPTION BONDS -- The Municipal Cash Management Fund may purchase
tender option bonds. A tender option bond is a Municipal Obligation (generally
held pursuant to a custodial arrangement) having a relatively long maturity and
bearing interest at a fixed rate substantially higher than prevailing short-term
tax exempt rates, that has been coupled with the agreement of a third party,
such as a bank, broker-dealer or other financial institution, pursuant to which
such institution grants the security holders the option, at periodic intervals,
to tender their securities to the institution and receive the face value
thereof. As consideration for providing the option, the financial institution
receives periodic fees equal to the difference between the Municipal
Obligation's fixed coupon rate and the rate, as determined by a remarketing or
similar agent at or near the commencement of such period, that would cause the
securities, coupled with the tender option, to trade at par on the date of such
determination. Thus, after payment of this fee, the security holder effectively
holds a demand obligation that bears interest at the prevailing short-term tax
exempt rate. The Investment Adviser, on behalf of the Fund, will consider on an
ongoing basis the creditworthiness of the issuer of the underlying Municipal
Obligation, of any custodian and of the third party provider of the tender
option. In certain instances and for certain tender option bonds, the option may
be terminable in the event of a default in payment of principal or interest on
the underlying Municipal Obligations and for other reasons. The Municipal Cash
Management Fund will not invest more than 10% of the value of its net assets in
securities that are illiquid, which would include tender option bonds as to
which it cannot exercise the tender feature on not more than seven days' notice
if there is no secondary market available for these obligations.

STAND-BY COMMITMENTS -- The Municipal Cash Management Fund may acquire
"stand-by commitments" with respect to Municipal Obligations held in its
portfolio. Under a stand-by commitment, the Fund obligates a broker, dealer or
bank to repurchase, at the Fund's option, specified securities at a specified
price and, in this respect, stand-by commitments are comparable to put options.
The exercise of a stand-by commitment therefore is subject to the ability of the
seller to make payment on demand. The Municipal Cash Management Fund will
acquire stand-by commitments solely to facilitate portfolio liquidity and does
not intend to exercise its rights thereunder for trading purposes. The
Municipal Cash Management Fund may pay for stand-by commitments if such action
is deemed

A-3
<PAGE> 25

necessary, thus increasing to a degree the cost of the underlying Municipal
Obligation and similarly decreasing such security's yield to investors.

INVESTMENT PRACTICES

LENDING PORTFOLIO SECURITIES -- From time to time, each of the Cash
Management Fund and U.S. Government Securities Cash Management Fund may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions. Such
loans may not exceed 33 1/3% of the value of the relevant Fund's total assets.
In connection with such loans, each of these Funds will receive collateral
consisting of cash or U.S. Government securities or, with respect to the Cash
Management Fund only, irrevocable letters of credit issued by financial
institutions. Such collateral will be maintained at all times in an amount equal
to at least 100% of the current market value of the loaned securities. Each of
these Funds can increase its income through the investment of such collateral.
Each of these Funds continues to be entitled to payments in amounts equal to the
interest and other distributions payable on the loaned security and receives
interest on the amount of the loan. Such loans will be terminable at any time
upon specified notice. A Fund might experience risk of loss if the institution
with which it has engaged in a portfolio loan transaction breaches its agreement
with such Fund.

ILLIQUID SECURITIES -- Each Fund may invest up to 10% of the value of its
net assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with its investment objective. Such
securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, participation interests that are not subject to the demand feature
described above, floating and variable rate demand obligations as to which the
Fund cannot exercise the related demand feature described above on not more than
seven days' notice and as to which there is no secondary market and repurchase
agreements providing for settlement in more than seven days after notice. As to
these securities, a Fund is subject to a risk that should such Fund desire to
sell them when a ready buyer is not available at a price the Fund deems
representative of their value, the value of such Fund's net assets could be
adversely affected.

BORROWING MONEY -- As a fundamental policy, each of the Municipal Cash
Management Fund and Treasury Prime Cash Management Fund is permitted to borrow
money to the extent permitted under the 1940 Act. However, each of these Funds
currently intends to borrow money from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of its total assets
(including the amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of a Fund's total assets, such Fund will not
make any additional investments.

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<PAGE> 26

PRAIRIE INSTITUTIONAL FUNDS
Cash Management Funds
INSTITUTIONAL And SERVICE SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 30, 1995

This Statement of Additional Information, which is not
a prospectus, supplements and should be read in conjunction with
the current Prospectus of Cash Management Fund, Municipal Cash
Management Fund, Treasury Prime Cash Management Fund and U.S.
Government Securities Cash Management Fund (each, a "Fund") of
Prairie Institutional Funds (the "Trust"), dated May 30, 1995,
as it may be revised from time to time. To obtain a copy of the
Funds' Prospectus, please write to the Trust at 125 West 55th
Street, New York, New York 10019, or call toll free 1-800-370-
9446.

First Chicago Investment Management Company (the
"Investment Adviser" or "FCIMCO") serves as each Fund's
investment adviser and administrator.

Concord Financial Group, Inc. (the "Distributor") is
the distributor of the Funds' shares.

TABLE OF CONTENTS

Page
Investment Objective and Management Policies . .B-2
Management of the Trust. . . . . . . . . . . . .B-13
Management Arrangements. . . . . . . . . . . . .B-15
Purchase of Fund Shares. . . . . . . . . . . . .B-19
Service Plan . . . . . . . . . . . . . . . . . .B-20
Redemption of Fund Shares. . . . . . . . . . . .B-21
Determination of Net Asset Value . . . . . . . .B-21
Portfolio Transactions . . . . . . . . . . . . .B-23
Dividends, Distributions and Taxes . . . . . . .B-23
Yield Information. . . . . . . . . . . . . . . .B-24
Information About the Trust. . . . . . . . . . .B-25
Counsel and Independent Auditors . . . . . . . .B-28
Appendix . . . . . . . . . . . . . . . . . . . .B-29
Financial Statements . . . . . . . . . . . . . .B-35
Reports of Independent Auditors. . . . . . . . .B-38, B-46, B-54
<PAGE> 27
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

The following information supplements and should be
read in conjunction with the sections in the Funds' Prospectus
entitled "Description of the Funds" and "Appendix."

Portfolio Securities and Investment Practices

Bank Obligations. (Cash Management Fund and, to a
limited extent, Municipal Cash Management Fund) Domestic
commercial banks organized under Federal law are supervised and
examined by the Comptroller of the Currency and are required to
be members of the Federal Reserve System and to have their
deposits insured by the Federal Deposit Insurance Corporation
(the "FDIC"). Domestic banks organized under state law are
supervised and examined by state banking authorities but are
members of the Federal Reserve System only if they elect to
join. In addition, state banks whose certificates of deposit
("CDs") may be purchased by the Fund are insured by the FDIC
(although such insurance may not be of material benefit to the
Fund, depending on the principal amount of the CDs of each bank
held by the Fund) and are subject to Federal examination and to
a substantial body of Federal law and regulation. As a result
of Federal or state laws and regulations, domestic branches of
domestic banks whose CDs may be purchased by the Fund generally
are required, among other things, to maintain specified levels
of reserves, are limited in the amounts which they can loan to a
single borrower and are subject to other regulation designed to
promote financial soundness. However, not all of such laws and
regulations apply to the foreign branches of domestic banks.

Obligations of foreign branches of domestic banks,
foreign subsidiaries of domestic banks, and domestic and foreign
branches of foreign banks, such as CDs and time deposits
("TDs"), may be general obligations of the parent banks in
addition to the issuing branch, or may be limited by the terms
of a specific obligation and governmental regulation. Such
obligations are subject to different risks than are those of
domestic banks. These risks include foreign economic and
political developments, foreign governmental restrictions that
may adversely affect payment of principal and interest on the
obligations, foreign exchange controls and foreign withholding
and other taxes on interest income. These foreign branches and
subsidiaries are not necessarily subject to the same or similar
regulatory requirements that apply to domestic banks, such as
mandatory reserve requirements, loan limitations, and
accounting, auditing and financial recordkeeping requirements.
In addition, less information may be publicly available about a
foreign branch of a domestic bank or about a foreign bank than
about a domestic bank.

Obligations of United States branches of foreign banks
may be general obligations of the parent bank in addition to the

B-2
<PAGE> 28
issuing branch, or may be limited by the terms of a specific
obligation or by Federal or state regulation as well as
governmental action in the country in which the foreign bank has
its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may be subject to reserve
requirements imposed by the Federal Reserve System or by the
state in which the branch is located if the branch is licensed
in that state.

In addition, Federal branches licensed by the
Comptroller of the Currency and branches licensed by certain
states ("State Branches") may be required to: (1) pledge to the
regulator, by depositing assets with a designated bank within
the state, a certain percentage of their assets as fixed from
time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a
specified percentage of the aggregate amount of liabilities of
the foreign bank payable at or through all of its agencies or
branches within the state. The deposits of Federal and State
Branches generally must be insured by the FDIC if such branches
take deposits of less than $100,000.

In view of the foregoing factors associated with the
purchase of CDs and TDs issued by foreign branches of domestic
banks, by foreign subsidiaries of domestic banks, by foreign
branches of foreign banks or by domestic branches of foreign
banks, the Investment Adviser carefully evaluates such
investments on a case-by-case basis.

These Funds may purchase CDs issued by banks, savings
and loan associations and similar thrift institutions with less
than $1 billion in assets, which are members of the FDIC,
provided the Fund purchases any such CD in a principal amount of
not more than $100,000, which amount would be fully insured by
the Bank Insurance Fund or the Savings Association Insurance
Fund administered by the FDIC. Interest payments on such a CD
are not insured by the FDIC. Neither of these Funds will own
more than one such CD per such issuer.

Foreign Securities. (Cash Management Fund) Foreign
securities markets generally are not as developed or efficient
as those in the United States. Securities of some foreign
issuers are less liquid and more volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in
most foreign securities markets are less than in the United
States and, at times, volatility of price can be greater than in
the United States.

Furthermore, some of these securities are subject to
brokerage taxes levied by foreign governments, which have the
effect of increasing the cost of such investment and reducing
the realized gain or increasing the realized loss on such
securities at the time of sale. Custodial expenses for a
portfolio of non-

B-3
<PAGE> 29
U.S. securities generally are higher than for a portfolio of
U.S. securities. Income earned or received by the Cash
Management Fund from sources within foreign countries may
be reduced by withholding and other taxes.

Repurchase Agreements. (Cash Management Fund,
Municipal Cash Management Fund and U.S. Government Securities
Cash Management Fund) The Trust's custodian or subcustodian
will have custody of, and will hold in a segregated account,
securities acquired by a Fund under a repurchase agreement.
Repurchase agreements are considered by the staff of the
Securities and Exchange Commission to be loans by the Fund that
enters into them. In an attempt to reduce the risk of incurring
a loss on a repurchase agreement, each of these Funds will enter
into repurchase agreements only with registered or unregistered
securities dealers or banks with total assets in excess of one
billion dollars, with respect to securities of the type in which
such Fund may invest, and will require that additional
securities be deposited with it if the value of the securities
purchased should decrease below the resale price. The
Investment Adviser will monitor on an ongoing basis the value of
the collateral to assure that it always equals or exceeds the
repurchase price. Each of these Funds will consider on an
ongoing basis the creditworthiness of the institutions with
which it enters into repurchase agreements.

Municipal Obligations. (Municipal Cash Management
Fund) The term "Municipal Obligations" generally includes debt
obligations issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works.
Other public purposes for which Municipal Obligations may be
issued include refunding outstanding obligations, obtaining
funds for general operating expenses and lending such funds to
other public institutions and facilities. In addition, certain
types of industrial development bonds are issued by or on behalf
of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately
operated housing facilities, sports facilities, convention or
trade show facilities, airport, mass transit, industrial, port
or parking facilities, air or water pollution control facilities
and certain local facilities for water supply, gas, electricity,
or sewage or solid waste disposal; the interest paid on such
obligations may be exempt from Federal income tax, although
current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal
Obligations if the interest paid thereon qualifies as exempt
from Federal income tax in the opinion of bond counsel to the
issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification
and between classifications.

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<PAGE> 30
Floating and variable rate demand notes and bonds are
tax exempt obligations ordinarily having stated maturities in
excess of 13 months, but which permit the holder to demand
payment of principal at any time, or at specified intervals not
exceeding 13 months, in each case upon not more than 30 days'
notice. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the obligations
plus accrued interest upon a specified number of days' notice to
the holders thereof. The interest rate on a floating rate
demand obligation is based on a known lending rate, such as a
bank's prime rate, and is adjusted automatically each time such
rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.

For the purpose of diversification under the
Investment Company Act of 1940 (the "1940 Act"), the
identification of the issuer of Municipal Obligations depends on
the terms and conditions of the security. When the assets and
revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government
creating the subdivision and the security is backed only by the
assets and revenues of the subdivision, such subdivision would
be deemed to be the sole issuer. Similarly, in the case of an
industrial development bond, if that bond is backed only by the
assets and revenues of the non-governmental user, then such non-
governmental user would be deemed to be the sole issuer. If,
however, in either case, the creating government or some other
entity guarantees a security, such a guaranty would be
considered a separate security and will be treated as an issue
of such government or other entity.

The yields on Municipal Obligations are dependent on a
variety of factors, including general economic and monetary
conditions, money market factors, conditions in the Municipal
Obligations market, size of a particular offering, maturity of
the obligation, and rating of the issue. The imposition of the
Fund's management fee, as well as other operating expenses, will
have the effect of reducing the yield to investors.

Municipal lease obligations or installment purchase
contract obligations (collectively, "lease obligations") have
special risks not ordinarily associated with Municipal
Obligations. Although lease obligations do not constitute
general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget
for, appropriate and make the payments due under the lease
obligation. However, certain lease obligations contain "non-
appropriation" clauses which provide that the municipality has
no obligation to make lease or installment purchase payments in
future years unless money is appropriated for such purpose on a
yearly basis. Although "non-appropriation" lease obligations
are secured by the leased

B-5
<PAGE> 31
property, disposition of the property in the event of foreclosure
might prove difficult. The Municipal Cash Management Fund will
seek to minimize these risks by investing only in those lease
obligations that (1) are rated in one of the two highest
categories for debt obligations by at least two nationally
recognized statistical rating organizations (or one rating
organization if the lease obligation was rated by only one such
organization); or (2) if unrated, are purchased principally from
the issuer or domestic banks or other responsible third parties,
in each case only if the seller shall have entered into an
agreement with the Municipal Cash Management Fund providing the
seller or other responsible third party will either remarket or
repurchase the lease obligations within a short period after
demand by the Fund. Not more than 10% of the value of the
Fund's net assets will be invested in lease obligations that
are illiquid and in other illiquid securities. See "Investment
Restrictions" below.

The Municipal Cash Management Fund will not
purchase tender option bonds unless (a) the demand feature applicable
thereto is exercisable by the Fund within 13 months of the date
of such purchase upon no more than 30 days' notice and
thereafter is exercisable by the Fund no less frequently than
annually upon no more than 30 days' notice and (b) at the time
of such purchase, the Investment Adviser reasonably expects (i)
based upon its assessment of current and historical interest
rate trends, that prevailing short-term tax exempt rates will
not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender option to terminate
the tender option would not occur prior to the time of the next
tender opportunity. At the time of each tender opportunity, the
Fund will exercise the tender option with respect to any tender
option bonds unless the Investment Adviser reasonably expects,
(x) based upon its assessment of current and historical interest
rate trends, that prevailing short-term tax exempt rates will
not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment, and
(y) that the circumstances which might entitle the grantor of a
tender option to terminate the tender option would not occur
prior to the time of the next tender opportunity. The Municipal
Cash Management Fund will exercise the tender feature with
respect to tender option bonds, or otherwise dispose of its
tender option bonds, prior to the time the tender option is
scheduled to expire pursuant to the terms of the agreement under
which the tender option is granted. The Municipal Cash
Management Fund otherwise will comply with the provisions of
Rule 2a-7 in connection with the purchase of tender option
bonds, including, without limitation, the requisite
determination by the Board of Trustees that the tender option
bonds in question meet the quality standards described in Rule
2a-7, which, in the case of a tender option bond subject to a
conditional demand feature, would include a determination that
the security has received both the required short-term and long-
term

B-6
<PAGE> 32
quality rating or is determined to be of comparable
quality. In the event of a default of the Municipal Obligation
underlying a tender option bond, or the termination of the
tender option agreement, the Municipal Cash Management Fund
would look to the maturity date of the underlying security for
purposes of compliance with Rule 2a-7 and, if its remaining
maturity was greater than 13 months, the Fund would sell the
security as soon as would be practicable. The Municipal Cash
Management Fund will purchase tender option bonds only when it
is satisfied that the custodial and tender option arrangements,
including the fee payment arrangements, will not adversely
affect the tax exempt status of the underlying Municipal
Obligations and that payment of any tender fees will not have
the effect of creating taxable income for the Fund. Based on
the tender option bond agreement, the Municipal Cash Management
Fund expects to be able to value the tender option bond at par;
however, the value of the instrument will be monitored to assure
that it is valued at fair value.

If, subsequent to its purchase by the Municipal
Cash Management Fund, (a) an issue of rated Municipal Obligations
ceases to be rated in the highest rating category by at least
two ratings organizations (or one rating organization if the
instrument was rated by only one such organization), or the
Trust's Board determines that it is no longer of comparable
quality; or (b) the Investment Adviser becomes aware that any
portfolio security not so highly rated or any unrated security
has been given a rating by any rating organization below the
rating organization's second highest rating category, the
Trust's Board will reassess promptly whether such security
presents minimal credit risk and will cause the Trust to take
such action as it determines is in the best interest of the Fund
and its shareholders, provided that the reassessment required by
clause (b) is not required if the portfolio security is disposed
of or matures within five business days of the Manager becoming
aware of the new rating and the Trust's Board is subsequently
notified of the Investment Adviser's actions.

To the extent that the ratings given by Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P") or Fitch Investors Service Inc. ("Fitch")
for Municipal Obligations may change as a result of changes in
such organizations or their rating systems, the Municipal Cash
Management Fund will attempt to use comparable ratings as
standards for its investments in accordance with the investment
policies contained in the Prospectus and this Statement of
Additional Information. The ratings of Moody's, S&P and Fitch
represent their opinions as to the quality of the Municipal
Obligations which they undertake to rate. It should be
emphasized, however, that ratings are relative and subjective
and are not absolute standards of quality. Although these
ratings may be an initial criterion for selection of portfolio
investments,

B-7
<PAGE> 33
the Investment Adviser will also evaluate these
securities and the creditworthiness of the issuers of such
securities.

Illiquid Securities. If a substantial market of
qualified institutional buyers develops pursuant to Rule 144A
under the Securities Act of 1933, as amended, for certain
restricted securities held by a Fund, the Trust intends to treat
such securities as liquid securities in accordance with
procedures approved by the Trust's Board of Trustees. Because
it is not possible to predict with assurance how the market for
restricted securities pursuant to Rule 144A will develop, the
Trust's Board of Trustees has directed the Investment Adviser to
monitor carefully each Fund's investments in such securities
with particular regard to trading activity, availability of
reliable price information and other relevant information. To
the extent that, for a period of time, qualified institutional
buyers cease purchasing restricted securities pursuant to Rule
144A, a Fund's investing in such securities may have the effect
of increasing the level of illiquidity in its investment
portfolio during such period.

Lending Portfolio Securities. (Cash Management
Fund and U.S. Government Securities Cash Management Fund) To a
limited extent, each of these Funds may lend its portfolio
securities to brokers, dealers and other financial institutions,
provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current
market value of the securities loaned. By lending its portfolio
securities, the Fund can increase its income through the
investment of the cash collateral. For purposes of this policy,
the Trust considers collateral consisting of U.S. Government
securities or, in the case of the Cash Management Fund only,
irrevocable letters of credit issued by banks whose securities
meet the standards for investment by the Fund to be the
equivalent of cash. Such loans may not exceed 33-1/3% of the
Fund's total assets. From time to time, the Fund may return to
the borrower or a third party which is unaffiliated with the
Fund, and which is acting as a "placing broker," a part of the
interest earned from the investment of collateral received for
securities loaned.

The Securities and Exchange Commission currently
requires that the following conditions must be met whenever
portfolio securities are loaned: (1) the Fund must receive at
least 100% cash collateral from the borrower; (2) the borrower
must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (3) the
Fund must be able to terminate the loan at any time; (4) the
Fund must receive reasonable interest on the loan, as well as
any interest or other distributions payable on the loaned
securities, and any increase in market value; and (5) the Fund
may pay only reasonable custodian fees in connection with the
loan. These conditions may be subject to future modification.

B-8
<PAGE> 34
Investment Restrictions

Cash Management and U.S. Government Securities
Cash Management Funds only. Each of the Cash Management Fund and
U.S. Government Securities Cash Management Fund has adopted
investment restrictions numbered 1 through 9 below as
fundamental policies. In addition, the Cash Management Fund has
adopted investment restrictions numbered 12 and 13 and the U.S.
Government Securities Cash Management Fund has adopted
investment restriction number 14 as additional fundamental
policies. These restrictions cannot be changed, as to a Fund,
without approval by the holders of a majority (as defined in the
1940 Act) of such Fund's outstanding voting shares. Investment
restrictions numbered 10 and 11 below are not fundamental
policies and may be changed by vote of a majority of the Trust's
Trustees at any time. Neither of these Funds may:

1. Borrow money, except from banks for
temporary or emergency (not leveraging) purposes in an amount
up to 15% of the value of the Fund's total assets (including
the amount borrowed) based on the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of
the Fund's total assets, the Fund will not make any additional
investments.

2. Pledge, hypothecate, mortgage or otherwise
encumber its assets, except to secure borrowings for temporary
or emergency purposes.

3. Sell securities short or purchase
securities on margin.

4. Write or purchase put or call options or
combinations thereof.

5. Act as an underwriter of securities of
other issuers, except to the extent the Fund may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.

6. Purchase or sell real estate, real estate
investment trust securities, commodities or commodity contracts,
or oil and gas interests.

7. Make loans to others, except through the
purchase of debt obligations referred to in the Fund's Prospectus,
except that the Fund may lend its portfolio securities in an amount
not to exceed 33-1/3% of the value of its total assets. Any loans
of portfolio securities will be made according to guidelines
established by the Securities and Exchange Commission and the
Trust's Trustees.

B-9
<PAGE> 35
8. Invest in companies for the purpose of
exercising control.

9. Invest in securities of other investment
companies, except as they may be acquired as part of a merger,
consolidation or acquisition of assets.

10. Enter into repurchase agreements providing
for settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
10% of the value of the Fund's net assets would be so invested.

11. Invest in oil, gas and other mineral
leases, or real estate limited partnerships.

The following investment restrictions numbered 12
and 13 apply only to the Cash Management Fund. The Cash Management
Fund may not:

12. Invest more than 5% of its assets in the
obligations of any one issuer, except that up to 25% of the
value of the Cash Management Fund's total assets may be invested
(subject to Rule 2a-7 under the 1940 Act) without regard to any
such limitations.

13. Invest less than 25% of its total assets in
securities issued by banks or invest more than 25% of its assets
in the securities of issuers in any other industry, provided
that there shall be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Notwithstanding the foregoing, for temporary
defensive purposes, the Cash Management Fund may invest less
than 25% of its total assets in bank obligations.

The following investment restriction number 14
applies only to the U.S. Government Securities Cash Management Fund.
The U.S. Government Securities Cash Management Fund may not:

14. Invest more than 25% of its total assets in
the securities of issuers in any single industry, provided that
there shall be no such limitation on investments in obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

Municipal Cash Management and Treasury Prime Cash
Management Funds only. Each of the Municipal Cash Management
Fund and Treasury Prime Cash Management Fund has adopted
investment restrictions numbered 1 through 7 below as
fundamental policies. In addition, the Municipal Cash
Management Fund has adopted investment restriction number 13 and
the Treasury Prime Cash Management Fund has adopted investment
restriction number 14 as additional fundamental policies. These
restrictions cannot be

B-10
<PAGE> 36
changed, as to a Fund, without approval by the holders of a
majority (as defined in the 1940 Act) of such Fund's outstanding
voting shares. Investment restrictions numbered 8 through 12 are
not fundamental policies and may be changed by vote of a majority
of the Trust's Trustees at any time. Neither of these Funds may:

1. Invest in commodities, except that each of
these Funds may purchase and sell options, forward contracts, futures
contracts, including those relating to indexes, and options on
futures contracts or indexes.

2. Purchase, hold or deal in real estate, or
oil, gas or other mineral leases or exploration or development
programs, but each of these Funds may purchase and sell
securities that are secured by real estate or issued by
companies that invest or deal in real estate.

3. Borrow money, except to the extent
permitted under the 1940 Act. For purposes of this investment
restriction, a Fund's entry into options, forward contracts,
futures contracts, including those relating to indexes, and
options on futures contracts or indexes shall not constitute
borrowing.

4. Make loans to others, except through the
purchase of debt obligations and the entry into repurchase agreements.

5. Act as an underwriter of securities of
other issuers, except to the extent a Fund may be deemed an under-
writer under the Securities Act of 1933, as amended, by virtue
of disposing of portfolio securities, and except that the
Municipal Cash Management Fund may bid separately or as part of
a group for the purchase of Municipal Obligations directly from
an issuer for its own portfolio to take advantage of the lower
purchase price available.

6. Issue any senior security (as such term is
defined in Section 18(f) of the 1940 Act), except to the extent
the activities permitted under Investment Restriction Nos. 1, 3,
9 and 10 may be deemed to give rise to senior securities.

7. Purchase securities on margin, but each of
these Funds may make margin deposits in connection with transactions
in options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts or
indexes.

8. Invest in the securities of a company for the
purpose of exercising management or control, but each of these
Funds will vote the securities it owns in its portfolio as a
shareholder in accordance with its views.

9. Pledge, mortgage or hypothecate its assets,
except to the extent necessary to secure permitted borrowings
and to the

B-11
<PAGE> 37
extent related to the deposit of assets in escrow in
connection with writing covered put and call options and the
purchase of securities on a when-issued or forward commitment
basis and collateral and initial or variation margin
arrangements with respect to options, forward contracts, futures
contracts, including those relating to indexes, and options on
futures contracts or indexes.

10. Purchase, sell or write puts, calls or
combinations thereof, except as described in the Prospectus and
this Statement of Additional Information.

11. Enter into repurchase agreements providing
for settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
10% of the value of the Fund's net assets would be so invested.

12. Invest in securities of other investment
companies, except to the extent permitted under the Act.

The following investment restriction number 13
applies only to the Municipal Cash Management Fund. The Municipal Cash
Management Fund may not:

13. Invest more than 25% of its total assets in
the securities of issuers in any single industry, provided that
there shall be no such limitation on the purchase of Municipal
Obligations and, for temporary defensive purposes, obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

The following investment restriction number 14
applies only to the Treasury Prime Cash Management Fund. The
Treasury Prime Cash Management Fund may not:

For purposes of the Municipal Cash Management
Fund's Investment Restriction No. 13, industrial development bonds,
where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are
grouped together as an "industry."

If a percentage restriction is adhered to at the
time of investment, a later increase or decrease in percentage
resulting from a change in values or assets will not constitute
a violation of such restriction.

B-12
<PAGE> 38
The Trust may make commitments more restrictive
than the restrictions listed above so as to permit the sale of a
Fund's shares in certain states. Should the Trust determine
that a commitment is no longer in the best interests of a Fund
and its shareholders, the Trust reserves the right to revoke the
commitment by terminating the sale of such Fund's shares in the
state involved.

MANAGEMENT OF THE TRUST

Trustees and officers of the Trust, together with
information as to their principal business occupations during at
least the last five years, are shown below.

Trustees of the Trust

JOHN P. GOULD, Trustee. Distinguished Service Professor of
Economics of the University of Chicago Graduate
School of Business. From 1983 to 1993, Dean of the
University of Chicago Graduate School of Business.
Dean Gould also serves as Director of Harpor
Capital Advisors. Mr. Gould is also a Board member of
three other funds in the Prairie Family of Funds. He is
55 years old and his address is 1101 East 58th
Street, Chicago, Illinois 60637.

MARILYN McCOY, Trustee. Vice President of Administration and
Planning of Northwestern University. From 1981 to
1985, she was the Director of Planning and Policy
Development for the University of Colorado. She
also serves on the Board of Directors of Evanston
Hospital, the Chicago Metropolitan YMCA, the Chicago Network
and United Charities. Mrs. McCoy is a member of the
Chicago Economics Club. Mrs. McCoy is also a
Board member of three other funds in the Prairie Family
of Funds. She is 46 years old and her address is
1100 North Lake Shore Drive, Chicago, Illinois 60611.

RAYMOND D. ODDI, Trustee. Private consultant. A Director of
Caremark International, Inc. and Medisense, Inc.,
companies in the health care industry, and Baxter
Credit Union. From 1978 to 1986, Senior Vice
President of Baxter International, Inc., a company
engaged in the production of medical care products.
He also is a member of the Illinois Society of
Certified Public Accountants. Mr. Oddi is also a
Board member of three other funds in the Prairie
Family of Funds. He is 66 years old and his
address is 1181 Loch Lane, Lake Forest, Illinois 60045.

B-13
<PAGE> 39
For so long as the plan described in the section
captioned "Service Plan" remains in effect, the Trustees of the
Trust who are not "interested persons" of the Trust, as defined
in the 1940 Act, will be selected and nominated by the Trustees
who are not "interested persons" of the Trust.

Officers of the Trust

JOSEPH F. KISSEL, President. Executive Vice President of
Concord Holding Corporation, the Trust's sub-
administrator (the "Sub-Administrator"), and an
officer of other investment companies administered
by the Sub-Administrator. He is 47 years old and his
address is 125 West 55th Street, New York, New
York 10019.

ANN E. BERGIN, Vice President. Senior Vice President of the
Sub-Administrator and an officer of other
investment companies administered by the Sub-Administrator.
She is 35 years old and her address is 125 West 55th
Street, New York, New York 10019.

STEPHEN A. SMITH, Vice President. Senior Vice President of the
Distributor, and an officer of other investment
companies distributed by the Distributor. He is
41 years old and his address is 125 West 55th Street,
New York, New York 10019.

RICHARD A. FABIETTI, Treasurer. Senior Vice President and
Treasurer of the Sub-Administrator and the
Distributor, and an officer of other investment
companies administered by the Sub-Administrator.
He is 36 years old and his address is 125 West 55th
Street, New York, New York 10019.
MARTIN G. FLANIGAN, Assistant Treasurer. Mutual Funds
Accounting Manager of the Sub-Administrator, and
an officer of other investment companies administered
by the Sub-Administrator. He is 31 years old and his
address is 125 West 55th Street, New York, New
York 10019.

GEORGE O. MARTINEZ, Secretary. Senior Vice President and
Director of Legal and Compliance Services with
BISYS Fund Services, since April 1995. Prior thereto,
he was Vice President and Associate General Counsel
with Alliance Capital Management L.P. He is 36 years
old and his address is 1900 E. Dublin-Granville Road,
Columbus, Ohio 43229.

LINDA MAHON, Assistant Secretary. Vice President of the Sub-
Administrator and Distributor, since January 1994.
Ms. Mahon is also an officer of other investment
companies administered by the Sub-Administrator.
From 1991 to

B-14
<PAGE> 40
1994, she was Corporate Secretary of J. & W.
Seligman & Co. Incorporated. From 1989 to 1991,
she was Vice President of Paribas Asset Management,
Inc. She is 40 years old and her address is 125 West
55th Street, New York, New York 10019.

ROBERT L. TUCH, Assistant Secretary. Since June 1991, an
employee of The Winsbury Company, which is an
affiliate of the Sub-Administrator. From July
1990 to June 1991, he was Vice President and Associate
General Counsel with National Securities Research Corp.
Prior thereto, he was an Attorney with the Securities
and Exchange Commission. He is 44 years old and his
address is 1900 E. Dublin-Granville Road, Columbus,
Ohio 43229.

The Trust pays its Trustees its allocable share of
the aggregate of a fixed fee of $25,000 per annum and a per meeting
fee of $1,000 for all funds in the Prairie Family of Funds. The
estimated aggregate amount of compensation payable to each
Trustee by the Trust and all other funds in the Prairie Family
of Funds for which such person is a Board member for the fiscal
year ending December 31, 1995 are as follows:

(3) (5)
Pension or Total
Retirement (4) Compensation
(2) Benefits Estimated From Fund and
(1) Aggregate Accrued as Part Annual Fund Complex
Name of Board Compensation of Fund's Benefits Upon Paid to Board
Member from Fund* Expenses Retirement Member
<S> <C> <C> <C> <C>

John P. Gould $5,295 None None $30,000
Marilyn McCoy $5,295 None None $30,000
Raymond D. Oddi $5,295 None None $30,000

<FN>
______________________
* Amount does not include reimbursed expenses for attending Board meeting, which are estimated to be approximately $350 for all
Trustees as a group.
</TABLE>

Board members and officers of the Trust, as a
group, owned less than 1% of any Fund's shares outstanding on
May 1, 1995.

MANAGEMENT ARRANGEMENTS

The following information supplements and should
be read in conjunction with the section in the Funds' Prospectus
entitled "Management of the Trust."

Investment Advisory Agreement. FCIMCO provides
investment advisory services pursuant to the Investment Advisory
Agreement (the "Agreement") dated as of January 1, 1995, with
the Trust. As to each Fund, the Agreement is subject to annual

B-15
<PAGE> 41
approval by (i) the Trust's Board of Trustees or (ii) vote of a
majority (as defined in the 1940 Act) of the outstanding voting
securities of such Fund, provided that in either event the
continuance also is approved by a majority of the Trustees who
are not "interested persons" (as defined in the 1940 Act) of the
Trust or FCIMCO, by vote cast in person at a meeting called for
the purpose of voting on such approval. As to each Fund, the
Agreement is terminable without penalty, on 60 days' notice, by
the Trust's Board of Trustees or by vote of the holders of a
majority of such Fund's shares, or, on not less than 90 days'
notice, by FCIMCO. The Agreement will terminate automatically,
as to the relevant Fund, in the event of its assignment (as
defined in the 1940 Act).

FCIMCO is responsible for investment decisions for
each Fund in accordance with the stated policies of such Fund,
subject to the approval of the Trust's Board of Trustees. All
purchases and sales are reported for the Trustees' review at the
meeting subsequent to such transactions.

The following persons are officers and/or
directors of FCIMCO: J. Stephen Baine, Chairman of the Board
of Directors, Chief Executive Officer and President; Alan F.
Delp, William G. Jurgensen, Joseph M. Thomas and David J.
Vitale, Directors; Terrall J. Janeway, Treasurer, Chief Financial
and Accounting Officer and Managing Director; Bradford M.
Markham, Secretary and Chief Legal Officer; and Richard A.
Davies, Deborah L. Edwards, Marco Hanig, David R. Kling and
Stephen P. Manus, Managing Directors.

As compensation for FCIMCO's investment advisory
services to the Trust, the Trust has agreed to pay FCIMCO a
monthly advisory fee at the annual rate of .20 of 1% of the
value of each Fund's average daily net assets.

Cash Management Fund and U.S. Government Securities
Cash Management Fund only. Prior to January 17, 1995, The First
National Bank of Chicago ("FNBC") provided management services
to First Prairie Cash Management and First Prairie U.S. Treasury
Securities Cash Management (the predecessor funds to the Cash
Management Fund and U.S. Government Securities Cash Management
Fund, respectively) pursuant to separate management agreements
with each such fund and engaged The Dreyfus Corporation
("Dreyfus") to provide administrative services to the funds. As
compensation for FNBC's services, First Prairie Cash Management
and First Prairie U.S. Treasury Securities Cash Management each
agreed to pay FNBC a monthly management fee at the annual rate
of .35 of 1% of the value of the fund's average daily net
assets. The fees payable to Dreyfus for its services were paid
by FNBC.

B-16
<PAGE> 42
For the period July 30, 1992 (commencement of
operations of First Prairie Cash Management) through June 30,
1993, no management fee was paid by First Prairie Cash
Management pursuant to an undertaking by FNBC. For the fiscal
year ended June 30, 1994, the management fee payable by First
Prairie Cash Management amounted to $892,114, which amount was
reduced by $304,836 pursuant to an undertaking by FNBC,
resulting in a net management fee paid by First Prairie Cash
Management of $587,278.

For the period June 2, 1992 (commencement of
operations of First Prairie U.S. Treasury Securities Cash
Management) through May 31, 1993, no management fee was paid by
First Prairie U.S. Treasury Securities Cash Management pursuant
to an undertaking by FNBC. For the fiscal year ended May 31,
1994, the management fee payable by First Prairie U.S. Treasury
Cash Management amounted to $1,478,021, which amount was reduced
by $477,943 pursuant to an undertaking by FNBC, resulting in a
net management fee paid by First Prairie U.S. Treasury Cash
Management of $1,000,078.

Administration and Sub-Administration Agreements.
Pursuant to an Administration Agreement dated as of January 1,
1995 with the Trust, FCIMCO assists in all aspects of the
Trust's operations, other than providing investment advice,
subject to the overall authority of the Trust's Board in
accordance with Massachusetts law. As compensation for FCIMCO's
administrative services to the Trust, the Trust has agreed to
pay FCIMCO a monthly administrative fee at the annual rate of
.15 of 1% of the value of each Fund's average daily net assets.
FCIMCO has engaged the Sub-Administrator to assist it in
providing certain administrative services to the Trust.
Pursuant to its agreement with FCIMCO (the "Sub-Administration
Agreement"), the Sub-Administrator assists FCIMCO in furnishing
the Trust clerical help, data processing, bookkeeping, internal
auditing and legal services and certain other services required
by the Trust, preparing reports to the Funds' shareholders, tax
returns, reports to and filings with the Securities and Exchange
Commission and state Blue Sky authorities, calculating the net
asset value of each Fund's shares and generally in providing for
all aspects of the Trust's operation, other than providing
investment advice. The fees payable to the Sub-Administrator
for its services are paid by FCIMCO.

The Trust has agreed that neither FCIMCO nor the
Sub-Administrator will be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in
connection with the matters to which each agreement with FCIMCO
or the Sub-Administration Agreement relates, except for a loss
resulting from wilful misfeasance, bad faith or gross negligence
on the part of FCIMCO in the performance of its obligations or
from reckless disregard by it of its obligations and duties

B-17
<PAGE> 43
under the Agreement or Administration Agreement or on the part
of the Sub-Administrator in the performance of its obligations
or from reckless disregard by it of its obligations and duties
under the Sub-Administration Agreement. The Sub-Administration
Agreement contains a similar provision whereby FCIMCO has agreed
to limit the Sub-Administrator's liability.

Expenses and Expense Information. All expenses
incurred in the operation of the Trust are borne by the Trust,
except to the extent specifically assumed by FCIMCO. The
expenses borne by the Trust include: organizational costs,
taxes, interest, brokerage fees and commissions, if any, fees of
Trustees who are not officers, directors, employees or holders
of 5% or more of the outstanding voting securities of FCIMCO,
Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining the Trust's existence, costs of
independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings, costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing shareholders, and any extraordinary expenses. In
addition, the Service Class of each Fund is subject to an annual
distribution and service fee. See "Service Plan." Expenses
attributable to a particular Fund or Class are charged against
the assets of that Fund or Class, respectively; other expenses
of the Trust are allocated among the Funds on the basis
determined by the Board of Trustees, including, but not limited
to, proportionately in relation to the net assets of each Fund.

FCIMCO has undertaken, as to each Fund, until such
time as it gives investors at least 90 days' notice to the
contrary, that if, in any fiscal year the aggregate expenses of
the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including
the investment advisory and administration fees, exceed .35% and
.60% of the value of the average net assets of the Institutional
Class and the Service Class, respectively, for the fiscal year,
the Trust may deduct from the payment to be made to FCIMCO under
the Agreement or Administration Agreement, or FCIMCO will bear,
such excess expense.

In addition, the Agreement provides that if, in
any fiscal year, the aggregate expenses of a Fund, exclusive of
taxes, brokerage, interest on borrowings and (with the prior
written consent of the necessary state securities commissions)
extraordinary expenses, but including the investment advisory
fee, exceed the expense limitation of any state having

B-18
<PAGE> 44
jurisdiction over the Fund, the Trust may deduct from the
payment to be made to FCIMCO under the Agreement, or FCIMCO will
bear, such excess expense to the extent required by state law.
Such deduction or payment, if any, will be estimated daily, and
reconciled and effected or paid, as the case may be, on a
monthly basis.

The aggregate of the fees payable to FCIMCO is not
subject to reduction as the value of the Fund's net assets
increases.

PURCHASE OF FUND SHARES

The following information supplements and should
be read in conjunction with the section in the Funds' Prospectus
entitled "How to Buy Fund Shares."

The Distributor. The Distributor serves as the
Trust's distributor pursuant to an agreement which is renewable
annually.

Using Federal Funds. Primary Fund Services Corp.,
the Trust's transfer and dividend disbursing agent (the "Transfer
Agent"), or the Trust may attempt to notify the investor upon
receipt of checks drawn on banks that are not members of the
Federal Reserve System as to the possible delay in conversion
into Federal Funds and may attempt to arrange for a better means
of transmitting the money. If the investor is a customer of a
securities dealer, bank or other financial institution and his
order to purchase Fund shares is paid for other than in Federal
Funds, the securities dealer, bank or other financial
institution, acting on behalf of its customer, generally will
complete the conversion into, or itself advance, Federal Funds
on the business day following receipt of the customer order.
The order is effective only when so converted and received by
the Transfer Agent. An order for the purchase of Fund shares
placed by an investor with a sufficient Federal Funds or cash
balance in his brokerage account with a securities dealer, bank
or other financial institution will become effective on the day
that the order, including Federal Funds, is received by the
Transfer Agent. In some states, banks or other institutions
effecting transactions in Fund shares may be required to
register as dealers pursuant to state law.

B-19

<PAGE> 45
SERVICE PLAN
(Service Shares Only)

The following information supplements and should
be read in conjunction with the section in the Funds' Prospectus
entitled "Service Plan."

Rule 12b-1 (the "Rule") adopted by the Securities
and exchange Commission under the 1940 Act provides, among other
things, that an investment company may bear expenses of
distributing its shares only pursuant to a plan adopted in
accordance with the Rule. The Trust's Board of Trustees has
adopted such a plan (the "Service Plan") with respect to each
Fund's Service Shares, pursuant to which each Fund pays the
Distributor for advertising, marketing and distributing such
Fund's Service Shares and for the provision of certain services
to the holders of Service Shares. Under the Service Plan, the
Distributor may make payments to certain financial institutions,
securities dealers and other financial industry professionals
(collectively, "Service Agents") in respect to these services.
The Trust's Board of Trustees believes that there is a
reasonable likelihood that the Service Plan will benefit each
Fund and the holders of Service Shares.

A quarterly report of the amounts expended under
the Service Plan, and the purposes for which such expenditures were
incurred, must be made to the Trustees for their review. In
addition, the Service Plan provides that it may not be amended
to increase materially the costs which holders of Service Shares
may bear pursuant to the Service Plan without the approval of
the holders of Service Shares and that other material amendments
of the Service Plan must be approved by the Board of Trustees
and by the Trustees who are not "interested persons" (as defined
in the 1940 Act) of the Trust and have no direct or indirect
financial interest in the operation of the Service Plan or in
any agreements entered into in connection with the Service Plan,
by vote cast in person at a meeting called for the purpose of
considering such amendments. The Service Plan is subject to
annual approval by such vote of the Trustees cast in person at a
meeting called for the purpose of voting on the Service Plan.
The Service Plan was so approved by the Trustees at a meeting
held on October 28, 1994. As to each Fund, the Service Plan may
be terminated at any time by vote of a majority of the Trustees
who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Service Plan or in
any agreements entered into in connection with the Service Plan
or by vote of the holders of a majority of such Fund's Service
Shares.

B-20
<PAGE> 46

REDEMPTION OF FUND SHARES

The following information supplements and should
be read in conjunction with the section in the Funds' Prospectus
entitled "How to Redeem Fund Shares."

Redemption Commitment. The Trust has committed
itself to pay in cash all redemption requests by any shareholder of
record of a Fund, limited in amount during any 90-day period to
the lesser of $250,000 or 1% of the value of such Fund's net
assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and
Exchange Commission. In the case of requests for redemption in
excess of such amount, the Board of Trustees reserves the right
to make payments in whole or in part in securities or other
assets in case of an emergency or any time a cash distribution
would impair the liquidity of the Fund to the detriment of the
existing shareholders. In such event, the securities would be
valued in the same manner as the Fund's securities are valued.
If the recipient sold such securities, brokerage charges would
be incurred.

Suspension of Redemptions. The right of redemption
may be suspended or the date of payment postponed (a) during any
period when the New York Stock Exchange is closed (other than
customary weekend and holiday closing), (b) when trading in the
markets the Fund ordinarily utilizes is restricted, or when an
emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the Securities and
Exchange Commission by order may permit to protect the Fund's
shareholders.

DETERMINATION OF NET ASSET VALUE

The following information supplements and should
be read in conjunction with the section in the Funds' Prospectus
entitled "How to Buy Fund Shares."

Amortized Cost Pricing. The valuation of each
Fund's portfolio securities is based upon their amortized cost which
does not take into account unrealized capital gains or losses.
This involves valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. While this method pro-
vides certainty in valuation, it may result in periods during
which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.

B-21
<PAGE> 47
The Board of Trustees has established procedures,
as a particular responsibility within the overall duty of care owed
to each Fund's investors, reasonably designed to stabilize the
Fund's price per share as computed for purposes of purchases and
redemptions at $1.00. Such procedures include review of each
Fund's portfolio holdings by the Board of Trustees, at such
intervals as it deems appropriate, to determine whether the
Fund's net asset value calculated by using available market
quotations or market equivalents deviates from $1.00 per share
based on amortized cost. In such review of the portfolio of the
Cash Management Fund, Treasury Prime Cash Management Fund and
U.S. Government Securities Cash Management Fund, investments for
which market quotations are readily available will be valued at
the most recent bid price or yield equivalent for such
securities or for securities of comparable maturity, quality and
type, as obtained from one or more of the major market makers
for the securities to be valued. Other investments and assets
of these Funds will be valued at fair value as determined in
good faith by the Board of Trustees. Market quotations and
market equivalents used in such review of the Municipal Cash
Management Fund are obtained from an independent pricing service
(the "Service") approved by the Board of Trustees. The Service
will value the Municipal Cash Management Fund's investments
based on methods which include consideration of: yields or
prices of municipal obligations of comparable quality, coupon,
maturity and type; indications of values from dealers; and
general market conditions. The Service also may employ
electronic data processing techniques and/or a matrix system to
determine valuations.

The extent of any deviation between a Fund's net
asset value based upon available market quotations or market equiva-
lents and $1.00 per share based on amortized cost will be ex-
amined by the Board of Trustees. If such deviation exceeds 1/2
of 1%, the Board of Trustees will consider what actions, if any,
will be initiated. In the event the Board of Trustees
determines that a deviation exists which may result in material
dilution or other unfair results to investors or existing
shareholders, it has agreed to take such corrective action as it
regards as necessary and appropriate, including: selling
portfolio instruments prior to maturity to realize capital gains
or losses or to shorten average portfolio maturity; withholding
dividends or paying distributions from capital or capital gains;
redeeming shares in kind; or establishing a net asset value per
share by using available market quotations or market
equivalents.

New York Stock Exchange Closings. The holidays
(as observed) on which the New York Stock Exchange is closed
currently are: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

B-22
<PAGE> 48

PORTFOLIO TRANSACTIONS

Newly-issued portfolio securities of the Municipal
Cash Management Fund and portfolio securities of each other Fund
ordinarily are purchased directly from the issuer or from an
underwriter or a market maker for the securities. Other
purchases and sales for the Municipal Cash Management Fund
usually are placed with those dealers from which it appears that
the best price or execution will be obtained. Ordinarily, no
brokerage commissions are paid by the Fund for such purchases.
Purchases from underwriters of portfolio securities may include
a concession paid by the issuer to the underwriter and the
purchase price paid to, and sales price received from, market
makers for the securities may reflect the spread between the bid
and asked price. No brokerage commissions have been paid by any
Fund to date.

Transactions are allocated to various dealers by
the Trust's investment personnel in their best judgment. The
primary consideration is prompt and effective execution of
orders at the most favorable price. Subject to that primary
consideration, dealers may be selected for research, statistical
or other services to enable FCIMCO to supplement its own
research and analysis with the views and information of other
securities firms and may be selected based upon their sales of
Fund shares.

Research services furnished by brokers through
which the Fund effects securities transactions may be used by FCIMCO
in advising other funds or accounts it advises and, conversely,
research services furnished to FCIMCO by brokers in connection
with other funds or accounts FCIMCO advises may be used by
FCIMCO in advising the Fund. Although it is not possible to
place a dollar value on these services, it is the opinion of
FCIMCO that the receipt and study of such services should not
reduce FCIMCO's overall research expenses.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The following information supplements and should
be read in conjunction with the section in Funds' Prospectus
entitled "Dividends, Distributions and Taxes."

Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gain or loss. However,
all or a portion of the gain realized from the disposition of
certain market discount bonds will be treated as ordinary income
under Section 1276 of the Internal Revenue Code of 1986, as
amended.

B-23
<PAGE> 49

YIELD INFORMATION

The following information supplements and should
be read in conjunction with the section in the Funds' Prospectus
entitled "Yield Information."

Yield is computed in accordance with a standardized
method which involves determining the net change in the value of
a hypothetical pre-existing Fund account having a balance of one
share at the beginning of a seven calendar day period for which
yield is to be quoted, dividing the net change by the value of
the account at the beginning of the period to obtain the base
period return, and annualizing the results (i.e., multiplying
the base period return by 365/7). The net change in the value
of the account reflects the value of additional shares purchased
with dividends declared on the original share and any such
additional shares and fees that may be charged to the
shareholder's account, in proportion to the length of the base
period and the Fund's average account size, but does not include
realized gains and losses or unrealized appreciation and
depreciation. Effective yield is computed by adding 1 to the
base period return (calculated as described above), raising that
sum to a power equal to 365 divided by 7, and subtracting 1 from
the result.

For the seven-day period ended April 30, 1995, the
yield and effective yield of each Fund, except the Municipal
Cash Management Fund which had not commenced operations as of
date of this Statement of Additional Information, were as
follows:
<TABLE>
<CAPTION>

Name of Fund and Class Yield Effective
Yield
<S> <C> <C>
Cash Management Fund
Institutional Shares 5.72% 5.48%
Service Shares 5.88% 5.62%
Treasury Prime Cash Management Fund
Institutional Shares 5.20% 5.34%
Service Shares 4.95% 5.07%
U.S. Government Securities Cash
Management Fund
Institutional Shares 5.74% 5.90%
Service Shares 5.49% 5.64%
</TABLE>

Tax equivalent yield for the Municipal Cash
Management Fund is computed by dividing that portion of the yield or
effective yield (calculated as described above) which is tax
exempt by 1 minus a stated tax rate and adding the quotient to
that portion, if any, of the yield of the Fund that is not tax
exempt. The tax equivalent figure, however, does not include
the potential effect of any state or local (including, but not
limited to, county, district or city) taxes, including

B-24
<PAGE> 50
applicable surcharges. In addition, there may be pending
legislation which could affect such stated tax rates or yields.
Each investor should consult its tax adviser, and consider its
own factual circumstances and applicable tax laws, in order to
ascertain the relevant tax equivalent yield.

Yields will fluctuate and are not necessarily
representative of future results. Each investor should remember
that yield is a function of the type and quality of the
instruments in the portfolio, portfolio maturity and operating
expenses. An investor's principal in the Fund is not
guaranteed. See "Determination of Net Asset Value" for a
discussion of the manner in which the Fund's price per share is
determined.

INFORMATION ABOUT THE TRUST

The following information supplements and should
be read in conjunction with the section in the Funds' Prospectus
entitled "General Information."

Each Fund share has one vote and, when issued and
paid for in accordance with the terms of the offering, is fully
paid and non-assessable. Fund shares have no preemptive,
subscription or conversion rights and are freely transferable.

The Trust will send annual and semi-annual
financial statements to all its shareholders.

As of May 22, 1995, the following shareholders
beneficially owned, directly or indirectly, 5% or more of the
indicated Fund's outstanding shares:

Percent of Cash
Management Fund
Institutional
Name and Address Shares Outstanding
<S> <C>
Eagle and Co. 52.6%
c/o American National Bank
Money Market Processing Unit
1 North LaSalle Street, 7th Floor
Chicago, IL 60690

First National Bank of Chicago 26.3%
Corporate Asset Services
Attn: Mutual Funds Manager
One First National Plaza, Ste. 0115
Chicago, IL 60670-0001
</TABLE>

B-25

<PAGE> 51
<TABLE>
<S> <C>
First National Bank of Chicago 9.1%
Cash Management Dept.
Attn: Randy Noren
525 West Monroe, Ste. 0256, 6th Floor
Chicago, IL 60670-0001

Morand and Co. 8.4%
c/o American National Bank
1 North LaSalle Street, 7th Floor
Chicago, IL 60690

Percent of Cash
Management Fund
Service Shares
Name and Address Outstanding

First National Bank of Chicago 92.0%
Cash Management Dept.
Attn: Randy Noren
525 West Monroe, Ste 0256, 6th Floor
Chicago, IL 60670-0001

Percent of Treasury
Prime Cash
Management Fund
Institutional
Name and Address Shares Outstanding

First National Bank of Chicago 95.3%
Cash Management Dept.
Attn: Randy Noren
525 West Monroe, Ste 0256, 6th Floor
Chicago, IL 60670-0001

Percent of Treasury
Prime Cash
Management Fund
Service Shares
Name and Address Outstanding

First National Bank of Chicago 95.9%
Corporate Trust Administration
Attn: Cash Sweep Coordinator
One First National Plaza, Ste 0126
Chicago, IL 60670-0001
</TABLE>

B-26

<PAGE> 52
<TABLE>
<S> <C>
Name and Address Percent of U.S.
Government
Securities Cash
Management Fund
Institutional
Name and Address Shares Outstanding

First National Bank of Chicago 58.6%
Corporate Trust Administration
Attn: Cash Sweep Coordinator
One First National Plaza, Ste 0126
Chicago, IL 60670-0001

First National Bank of Chicago 25.5%
Corporate Asset Services
Attn: Mutual Funds Manager
One First National Plaza, Ste 0115
Chicago, IL 60670-0001

First National Bank of Chicago 5.5%
Cash Management Dept.
Attn: Randy Noren
525 West Monroe, Ste 0256, 6th Floor
Chicago, IL 60670-0001

Eagle and Co. 5.0%
c/o American National Bank
Money Market Processing Unit
1 North LaSalle St., 7th Floor
Chicago, IL 60690

Percent of U.S.
Government
Securities Cash
Management Fund
Service Shares
Name and Address Outstanding

First National Bank of Chicago 99.1%
Cash Management Dept.
Attn: Randy Noren
525 West Monroe, Ste 0256, 6th Floor
Chicago, IL 60670-0001
</TABLE>

A shareholder who beneficially owns, directly or
indirectly, more than 25% of a Fund's voting securities may be
deemed a "control person" (as defined in the 1940 Act) of the
Fund.

B-27
<PAGE> 53
COUNSEL AND INDEPENDENT AUDITORS

Stroock & Stroock & Lavan, 7 Hanover Square, New York,
New York 10004-2594, as counsel for the Trust, has rendered its
opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares of beneficial
interest being sold pursuant to the Funds' Prospectus.

Ernst & Young LLP, 787 Seventh Avenue, New York,
New York 10019, independent auditors, have been selected as auditors
of the Trust.

B-28
<PAGE> 54
APPENDIX

Description of the highest commercial paper,
municipal bond and note and other short- and long-term rating
categories assigned by Standard & Poor's Corporation ("S&P"),
Moody's Investors Service, Inc. ("Moody's"), Fitch Investors
Service, Inc. ("Fitch"), Duff & Phelps Credit Rating Co.
("Duff"), IBCA Limited and IBCA Inc. ("IBCA") and Thomson
BankWatch, Inc. ("BankWatch"):

S&P

Commercial Paper and Short-Term Ratings

The designation A-1 by S&P indicates that the
degree of safety regarding timely payment is either overwhelming or
very strong. Those issues determined to possess overwhelming
safety characteristics are denoted with a plus sign (+)
designation.

Municipal Bond Ratings

An S&P municipal bond rating is a current
assessment of the creditworthiness of an obligor with respect
to a specific obligation.

The ratings are based on current information
furnished by the issuer or obtained by S&P from other sources it
considers reliable, and will include: (1) likelihood of
default-capacity and willingness of the obligor as to the timely
payment of interest and repayment of principal in accordance with
the terms of the obligation; (2) nature and provisions of the obligation;
and (3) protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws
affecting creditors' rights.

AAA

Debt rated AAA has the highest rating assigned by
S&P. Capacity to pay interest and repay principal is extremely
strong.

Debt rated AA has a very strong capacity to pay
interest and repay principal and differs from the highest rated
issues only in small degree. The AA ratings may be modified by
the addition of a plus (+) or a minus (-) sign, which is used to
show relative standing within the category.

B-29
<PAGE> 55
Municipal Note Ratings

SP-1

The issuers of these municipal notes exhibit very
strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics
are given a plus (+) designation.

SP-2

The issuers of these municipal notes exhibit
satisfactory capacity to pay principal and interest.

Moody's

Commercial Paper and Short-Term Ratings

The rating Prime-1 (P-1) is the highest commercial
paper rating assigned by Moody's. Issuers of P-1 paper must
have a superior capacity for repayment of short-term promissory
obligations and ordinarily will be evidenced by leading market
positions in well established industries, high rates of return
of funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad
margins and earnings coverage of fixed financial charges and
high internal cash generation, and well established access to a
range of financial markets and assured sources of alternate
liquidity.

Municipal Bond Ratings

Aaa

Bonds which are rated Aaa are judged to be of the
best quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such
issues.
Aa

Bonds which are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they
comprise what generally are known as high grade bonds. They are
rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be
other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.

B-30
<PAGE> 56
Moody's applies the numerical modifiers 1, 2 and 3
to show relative standing within the AA rating category. The
modifier 1 indicates a ranking for the security in the higher
end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.

Municipal Note Ratings

Moody's ratings for state and municipal notes and
other short-term loans are designated Moody's Investment Grade
(MIG). Such ratings recognize the difference between short-term
credit risk and long-term risk. Factors affecting the liquidity
of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in
bond risk, long-term secular trends for example, may be less
important over the short run.

A short-term rating may also be assigned on an
issue having a demand feature. Such ratings will be designated as
VMIG or, if the demand feature is not rated, as NR. Short-term
ratings on issues with demand features are differentiated by the
use of the VMIG symbol to reflect such characteristics as
payment upon periodic demand rather than fixed maturity dates
and payment relying on external liquidity. Additionally,
investors should be alert to the fact that the source of payment
may be limited to the external liquidity with no or limited
legal recourse to the issuer in the event the demand is not met.

Moody's short-term ratings are designated Moody's
Investment Grade as MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As
the name implies, when Moody's assigns a MIG or VMIG rating, all
categories define an investment grade situation.

MIG 1/VMIG 1

This designation denotes best quality. There is
present strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the
market for refinancing.

MIG 2/VMIG 2

This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding
group.

B-31
<PAGE> 57
Fitch

Commercial Paper and Short-Term Ratings

The rating Fitch-1 (Highest Grade) is the highest
commercial paper rating assigned by Fitch. Paper rated Fitch-1
is regarded as having the strongest degree of assurance for
timely payment.

Municipal Bond Ratings

The ratings represent Fitch's assessment of the
issuer's ability to meet the obligations of a specific debt
issue or class of debt. The ratings take into consideration
special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and
operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect
the issuer's future financial strength and credit quality.

AAA

Bonds rated AAA are considered to be investment
grade and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably
foreseeable events.

Bonds rated AA are considered to be investment
grade and of very high credit quality. The obligor's ability to apply
interest and repay principal is very strong, although not quite
as strong as bonds rated AAA. Because bonds rated in the AAA
and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these
issuers is generally rated F-1+. Plus (+) and minus (-) signs
are used with a rating symbol to indicate the relative position
of a credit within the rating category.

Duff

Commercial Paper and Short-Term Ratings

The rating Duff-1 is the highest commercial paper
rating assigned by Duff. Paper rated Duff-1 is regarded as
having very high certainty of timely payment with excellent
liquidity factors which are supported by ample asset protection.
Risk factors are minor.

B-32
<PAGE> 58

AAA

Bonds rated AAA are considered highest credit
quality. The risk factors are negligible, being only slightly
more than for risk-free U.S. Treasury debt.

Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions. Plus
(+) and minus (-) signs are used with a rating to indicate the
relative position of a credit within the AA rating category.

IBCA

Commercial Paper and Short-Term Ratings

The designation A-1 by IBCA indicates that the
obligation is supported by a very strong capacity for timely
repayment. Those obligations rated A1+ are supported by the
highest capacity for timely repayment.

Bond and Long-Term Ratings

Obligations rated AAA by IBCA have the lowest
expectation of investment risk. Capacity for timely repayment
of principal and interest is substantial, such that adverse
changes in business, economic or financial conditions are
unlikely to increase investment risk significantly.

IBCA also assigns a rating to certain
international and U.S. banks. An IBCA bank rating represents IBCA's
current assessment of the strength of the bank and whether such bank
would receive support should it experience difficulties. In its
assessment of a bank, IBCA uses a dual rating system comprised
of Legal Ratings and Individual Ratings. In addition, IBCA
assigns banks Long- and Short-Term Ratings as used in the
corporate ratings discussed above. Legal Ratings, which range
in gradation from 1 through 5, address the question of whether
the bank would receive support provided by central banks or
shareholders if it experienced difficulties, and such ratings
are considered by IBCA to be a prime factor in its assessment of
credit risk. Individual Ratings, which range in gradations from
A through E, represent IBCA's assessment of a bank's economic
merits and address the question of how the bank would be viewed
if it were entirely independent and could not rely on support
from state authorities or its owners.

B-33
<PAGE> 59
BankWatch

Commercial Paper and Short-Term Ratings

The rating TBW-1 is the highest short-term rating
assigned by BankWatch; the rating indicates that the degree of
safety regarding timely repayment of principal and interest is
very strong.

In addition to ratings of short-term obligations,
BankWatch assigns a rating to each issuer it rates, in
gradations of A through E. BankWatch examines all segments of
the organization including, where applicable, the holding
company, member banks or associations, and other subsidiaries.
In those instances where financial disclosure is incomplete or
untimely, a qualified rating (QR) is assigned to the
institution. BankWatch also assigns, in the case of foreign
banks, a country rating which represents an assessment of the
overall political and economic stability of the country in which
the bank is domiciled.

B-34
<PAGE> 60

<TABLE>

FINANCIAL STATEMENTS

Prairie Institutional Funds
Statement of Assets and Liabilities
November 16, 1994

Treasury U.S. Government
Municipal Prime Securities
Cash Cash Cash Cash
Management Management Management Management
ASSETS Fund Fund Fund Fund

<S> <C> <C> <C> <C>
Cash. . . . . . . . . . . . . . . . . $ 12,501 $ 37,499 $ 37,499 $ 12,501
Deferred organization costs 31,250 31,250 31,250 31,250
Total Assets . . . . . . . . . . . 43,751 68,749 68,749 43,751

LIABILITIES

Organization costs payable 31,250 31,250 31,250 31,250

NET ASSETS . . . . . . . . . . . . . . . . . $ 12,501 $ 37,499 $ 37,499 $ 12,501

Shares Outstanding ($0.001 par value,
unlimited number of shares authorized,
issued at $1.00 per share):
Institutional Shares. . . . . . . . . 1 24,999 24,999 1
Service Shares. . . . . . . . . . . . 12,500 12,500 12,500 12,500
Total Shares Outstanding . . . . . . . . . . 12,501 37,499 37,499 12,501

Net Asset Value, Offering Price and
Redemption Price per Share . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00

Composition of Net Assets:
Shares of beneficial interest, at par $ 13 $ 37 $ 37 $ 13
Additional paid-in capital 12,488 37,462 37,462 12,488
Net Assets, November 16, 1994. . . . . . . . $ 12,501 $ 37,499 $ 37,499 $ 12,501

</TABLE>

See notes to financial statements.

B-35
<PAGE> 61
PRAIRIE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 16, 1994

NOTE 1 - GENERAL

Prairie Institutional Funds (the "Trust") was organized as a
Massachusetts business trust on October 19, 1994. The Trust
consists of four portfolios; Cash Management Fund, Municipal
Cash Management Fund, Treasury Prime Cash Management Fund and
U.S. Government Securities Cash Management Fund (collectively,
the "Funds").

The First National Bank of Chicago ("First Chicago") serves as
investment adviser to the Trust. Concord Financial Group, Inc.
(the "Distributor"), a wholly-owned subsidiary of Concord
Holding Corporation ("Concord"), serves as each Fund's
distributor.

The Funds each offer two classes of shares--Institutional Shares
and Service Shares. Institutional Shares and Service Shares are
essentially the same except that Service Shares bear the fees
that are payable under a Service Plan (the "Service Plan"),
adopted pursuant to Rule 12b-1 under the Investment Company Act
of 1940, at an annual rate of 0.25% of the average daily net
assets of the outstanding Service Shares.

The Funds have had no operations other than the sale to Concord
of 12,501 shares of the Cash Management Fund for $12,501, 37,499
shares of the Municipal Cash Management Fund for $37,499, 37,499
shares of the Treasury Prime Cash Management Fund for $37,499
and 12,501 shares of the U.S. Government Securities Cash
Management Fund for $12,501.

Organization costs incurred in connection with the organization
and initial registration of the Funds will be paid initially by
Concord and reimbursed by the Funds. Such organizational costs
have been deferred and will be amortized ratably over a period
of sixty months from the commencement of operations.

NOTE 2 - AGREEMENTS

The Trust has an Investment Advisory Agreement with First
Chicago. Pursuant to the terms of the Investment Advisory
Agreement, First Chicago is responsible for the purchases and
sales of each Fund's portfolio securities. For its advisory
services, First Chicago is entitled to a fee, accrued daily and
paid monthly, at an annual rate of 0.20% of each Fund's average
daily net assets. The Trust also has an Administration
Agreement with First Chicago, pursuant to which it has agreed to
pay First Chicago 0.15% of each Fund's average daily net assets.

B-36
<PAGE> 62
First Chicago has entered into a Master Sub-Administration
Agreement with Concord. Pursuant to the terms of this
agreement, Concord has agreed to assist in providing certain
administrative services for the Trust. For its services,
Concord will receive a fee from First Chicago.

The Distributor has entered into a Distribution Agreement with
the Trust. The Distributor does not receive a fee under the
Distribution Agreement.

Under the Service Plan with respect to the Funds' Service
Shares, each Fund pays the Distributor for advertising,
marketing and distributing such Fund's Service Shares and for
providing certain services to the holders of Service Shares at
an annual rate of 0.25% of the average net assets of the
outstanding Service Shares. Under the Service Plan, the
Distributor may make payments to other service organizations in
respect of the provision of these services to their clients who
are the beneficial owners of Service Shares. Such service
organizations may include First Chicago, Concord and their
affiliates.

First Chicago has voluntarily agreed to waive a portion of its
fees to the extent that the ordinary operating expenses
(excluding fees incurred under the Service Plan) of any Fund
exceeds 0.35% and 0.65% of the average daily net assets of such
Fund's Institutional Shares and Service Shares, respectively.

B-37
<PAGE> 63
REPORT OF INDEPENDENT AUDITORS

Shareholder and Board of Trustees
Prairie Institutional Funds

We have audited the accompanying statement of assets and liabil-
ities of each portfolio of Prairie Institutional Funds as of
November 16, 1994. This statement of assets and liabilities is
the responsibility of the Fund's management. Our responsibility
is to express an opinion on this statement of assets and
liabilities based on our audit.

We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
this statement of assets and liabilities is free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement
of assets and liabilities. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall statement of
assets and liabilities presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the statement of assets and liabilities referred
to above presents fairly, in all material respects, the
financial position of each portfolio of Prairie Institutional
Funds at November 16, 1994, in conformity with generally
accepted accounting principles.

Ernst & Young LLP

New York, New York
November 16, 1994

B-38
<PAGE> 64

<TABLE>

FIRST PRAIRIE CASH MANAGEMENT
STATEMENT OF INVESTMENTS

JUNE 30, 1994

<CAPTION>
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT-11.9% AMOUNT VALUE

<S> <C> <C>
Dai-Ichi Kangyo Bank Ltd. (Yankee)
4.16%, 7/20/94 . . . . . . . . . . . . . . . . . . . . . $ 10,000,000 $ 10,000,311

Mitsubishi Bank Ltd. (Yankee)
4.50%, 8/15/94 . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,002,807

Rabobank Nederland N.V. (Yankee)
4.20%, 8/12/94 . . . . . . . . . . . . . . . . . . . . . 9,000,000 8,993,483

TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $28,996,601) . . . . . . . . . . . . . . . . . . . $ 28,996,601

BANKERS' ACCEPTANCES-8.2%

Fuji Bank Ltd. (Yankee)
4.51%, 8/15/94 . . . . . . . . . . . . . . . . . . . . . $ 10,000,000 $ 9,944,250

Sakura Bank Ltd. (Yankee)
4.39%, 7/15/94 . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,983,044
TOTAL BANKERS' ACCEPTANCES (cost $19,927,294) $ 19,927,294

COMMERCIAL PAPER-34.6%

ABN-Amro Bank N.V.
4.53%, 8/17/94 . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,941,511

Banc One Corp.
4.51%, 8/31/94 . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,924,597

Bank of Nova Scotia
3.84%, 7/11/94 . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,989,444

Barclays Bank of Canada
4.67%, 10/3/94 . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,879,889

Enterprise Funding Corp.
4.60%, 9/23/94(a). . . . . . . . . . . . . . . . . . . . 10,000,000 9,894,300

Iris Partners L.P.
3.97%, 7/12/94(a). . . . . . . . . . . . . . . . . . . . 5,084,000 5,077,895

MCA Funding Corp.
4.63%, 10/24/94. . . . . . . . . . . . . . . . . . . . . 10,000,000 9,854,653

WMX Technologies Inc.
4.71%, 10/18/94. . . . . . . . . . . . . . . . . . . . . 10,000,000 9,859,814

Woodside Finance Ltd.
4.56%, 9/12/94 . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,908,750

TOTAL COMMERCIAL PAPER (cost $84,330,853) $ 84,330,853

CORPORATE NOTES-8.2%

General Electric Capital Corp.
3.48%, 8/25/94 . . . . . . . . . . . . . . . . . . . . . $ 10,000,000 $ 9,999,311

Merrill Lynch & Co. Inc.
4.40%, 6/7/95(b) . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000

TOTAL CORPORATE NOTES (cost $19,999,311) . . . . . . . . . $ 19,999,311
</TABLE>

B-39
<PAGE> 65

<TABLE>
<CAPTION>
FIRST PRAIRIE CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1994
PRINCIPAL
SHORT-TERM BANK NOTES - 4.1% AMOUNT VALUE

<S> <C> <C> <C>
NationsBank of North Carolina N.A.
3.52%, 8/18/94 . . . . . . . . . . . . . . . . . . . . . $ 5,000,000 $ 4,999,869

PNC Bank N.A.
3.63%, 1/20/95 . . . . . . . . . . . . . . . . . . . . . 5,000,000 4,997,859

TOTAL SHORT-TERM BANK NOTES
(cost $9,997,728). . . . . . . . . . . . . . . . . . . . . $ 9,997,728

U.S. TREASURY BILLS-4.0%

4.59%, 12/15/94
(cost $9,792,410). . . . . . . . . . . . . . . . . . . . $ 10,000,000 $ 9,792,410

U.S. GOVERNMENT AGENCIES-16.4%

Agency for International Development
Floating Rate Notes
5.05%, 5/1/2023(b) . . . . . . . . . . . . . . . . . . . $ 5,000,000 $ 5,000,000

Federal Home Loan Banks
Floating Rate Notes
4.92%, 3/17/2000(b). . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000

Student Loan Marketing Association
Floating Rate Notes
3.99%, 6/8/95(b) . . . . . . . . . . . . . . . . . . . . 25,000,000 25,000,000

TOTAL U.S. GOVERNMENT AGENCIES (cost $40,000,000). . . . . $ 40,000,000

TOTAL INVESTMENTS
(cost $213,044,197). . . . . . . . . . . . . . 87.4% $213,044,197

CASH AND RECEIVABLES (NET) . . . . . . . . . . . 12.6% $ 30,775,727

NET ASSETS . . . . . . . . . . . . . . . . 100.0% $243,819,924
</TABLE>

NOTES TO STATEMENT OF INVESTMENTS:

(a) Backed by an irrevocable letter of credit.
(b) Variable interest rate - subject to periodic change.

See notes to financial statements.

B-40
<PAGE> 66

<TABLE>
<CAPTION>
FIRST PRAIRIE CASH MANAGEMENT
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value-Note 1(a) $213,044,197
Cash . . . . . . . . . . . . . . . . . . . . . 4,934,072
Receivable for investment securities sold 25,168,213
Interest receivable. . . . . . . . . . . . . . . . . . . 779,843
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 65,750
243,992,075

LIABILITIES:

Due to The First National Bank of Chicago $ 96,084
Accrued expenses and other liabilities . . . . . . . . . 76,067 172,151

NET ASSETS . . . . . . . . . . . . . . . . . . . . . $243,819,924

REPRESENTED BY:

Paid-in capital. . . . . . . . . . . . . . . . . . . . . $243,979,657
Accumulated net realized (loss) on investments (159,733)

NET ASSETS at value applicable to 243,979,657
outstanding shares of Beneficial Interest,
equivalent to $1.00 per share (unlimited number
of $.001 par value shares authorized). . . . . . . . . . $243,819,924

NET ASSET VALUE, offering and redemption
price per share ($243,819,924 /
243,979,657 shares). . . . . . . . . . . . . . . . . . . $1.00

<CAPTION>
STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1994
<S> <C> <C>
INVESTMENT INCOME:

INTEREST INCOME. . . . . . . . . . . . . . . . . . . . . $ 9,285,026

EXPENSES:

Management fee-Note 2(a) . . . . . . . . . . . . . . . $ 892,114
Professional fees. . . . . . . . . . . . . . . . . . . 49,300
Registration fees. . . . . . . . . . . . . . . . . . . 48,880
Custodian fees . . . . . . . . . . . . . . . . . . . . 42,222
Prospectus and shareholders' reports . . . . . . . . . 17,514
Trustees' fees and expenses-Note 2(b) 6,262
Shareholder servicing costs. . . . . . . . . . . . . . 3,753
Miscellaneous. . . . . . . . . . . . . . . . . . . . . 35,851
1,095,896
Less-reduction in management fee due
to undertakings-Note 2(a) . . . . . . . . . . . . . 304,836
TOTAL EXPENSES. . . . . . . . . . . . . . . . . . 791,060

INVESTMENT INCOME-NET. . . . . . . . . . . . . . . . . . . 8,493,966

NET REALIZED (LOSS) ON INVESTMENTS-Note 1(b) (136,023)

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . . . . . . . . $ 8,357,943
</TABLE>

See notes to financial statements.

B-41
<PAGE> 67
<TABLE>
<CAPTION>
FIRST PRAIRIE CASH MANAGEMENT
STATEMENT OF CHANGES IN NET ASSETS JUNE 30, 1994

YEAR ENDED JUNE 30,
1993* 1994
<S> <C> <C>
OPERATIONS:
Investment income-net. . . . . . . . . . . . . . . . . . $ 2,487,708 $ 8,493,966

Net realized (loss) on investments . . . . . . . . . . . (23,710) (136,023)

NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS. . . . . . . . . . . . . . . . . . . . 2,463,998 8,357,943

DIVIDENDS TO SHAREHOLDERS FROM;

Investment income-net. . . . . . . . . . . . . . . . . . (2,487,708) (8,493,966)

BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):

Net proceeds from shares sold. . . . . . . . . . . . . . 1,971,179,813 2,167,517,783

Dividends reinvested . . . . . . . . . . . . . . . . . . 100,330 654,107
Cost of shares redeemed. . . . . . . . . . . . . . . . (1,795,643,634) (2,099,928,742)

INCREASE IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS. . . . . . . . . . . . . . . . . 175,636,509 68,243,148

TOTAL INCREASE IN NET ASSETS . . . . . . . . . . . . . . 175,612,799 68,107,125

NET ASSETS:

Beginning of year. . . . . . . . . . . . . . . . . . . . 100,000 175,712,799

End of year. . . . . . . . . . . . . . . . . . . . . . . $ 175,712,799 $ 243,819,924

<FN>
- --------------
* From July 30, 1992 (commencement of operations) to June 30, 1993.
</TABLE>

See notes to financial statements.

B-42
<PAGE> 68
<TABLE>
<CAPTION>
FIRST PRAIRIE CASH MANAGEMENT
FINANCIAL HIGHLIGHTS

YEAR ENDED JUNE 30,
1993(1) 1994
PER SHARE DATA:
<S> <C> <C>

Net asset value, beginning of year . . . . . . . . . . . $ 1.0000 $.9999

INVESTMENT OPERATIONS:
Investment income - net. . . . . . . . . . . . . . . . . .0297 .0333
Net realized (loss) on investments . . . . . . . . . . . (.0001) (.0006)
TOTAL FROM INVESTMENT OPERATIONS . . . . . . . . . . . .0296 .0327

DISTRIBUTIONS:
Dividends from investment income-net . . . . . . . . . . (.0297) (.0333)
Net asset value, end of year . . . . . . . . . . . . . . $ .9999 $.9993

TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . 3.25%(2) 3.38%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .05%(2) .31%
Ratio of net investment income to
average net assets . . . . . . . . . . . . . . . . . . 3.19%(2) 3.33%
Decrease reflected in above expense
ratios due to undertakings by the
Manager . . . . . . . . . . . . . . . . . . . . . .51%(2) .12%
Net Assets, end of year (000's omitted) $175,713 $243,820
<FN>
________________
(1) From July 30, 1992 (commencement of operations) to June 30, 1993.
(2) Annualized.
</TABLE>

B-43
<PAGE> 69
FIRST PRAIRIE CASH MANAGEMENT
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:

The Fund is registered under the Investment Company Act
("Act") as a diversified open-end management investment company.
The First National Bank of Chicago ("Manager") serves as the Fund's
investment adviser. The Dreyfus Corporation ("Dreyfus") provides
certain administrative services to the Fund-see Note 2(a). Dreyfus
Service Corporation ("Distributor"), a wholly-owned subsidiary
of Dreyfus, acts as the exclusive distributor of the Fund's
shares, which are sold without a sales charge.

It is the Fund's policy to maintain a continuous net asset
value per share of $1.00; the Fund has adopted certain
investment, portfolio valuation and dividend and distribution
policies to enable it to do so.

(A) PORTFOLIO VALUATION: Investments are valued at amortized
cost, which has been determined by the Fund's Board of Trustees
to represent the fair value of the Fund's investments.

(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis.
Realized gain and loss from securities transactions are recorded on
the identified cost basis. Interest income is recognized on the
accrual basis. Cost of investments represent amortized cost.

(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund
to declare dividends daily from investment income-net. Such
dividends are paid monthly. Dividends from net realized capital
gain, if any, are normally declared and paid annually, but the
Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code.
To the extent that net realized capital gain can be offset by
capital loss carryovers, it is the policy of the Fund not to
distribute such gain.

(D) FEDERAL INCOMES TAXES: It is the policy of the Fund to
continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by
complying with the provisions available to certain investment
companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of taxable income
sufficient to relieve it from all, or substantially all, Federal
income taxes.

The Fund has an unused capital loss carryover of
approximately $19,000 available for Federal income tax purposes
to be applied against future net securities profits, if any realized
subsequent to June 30, 1994. The carryover does not include net
realized securities losses from November 1, 1993 through June 30, 1994
which are treated, for Federal income tax purposes, as arising
in fiscal 1995. If not applied, the carryover expires in fiscal
2002.

At June 30, 1994, the cost of investments for Federal income
tax purposes was substantially the same as the cost for
financial reporting purposes (see the Statement of Investments).

NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:

B-44
<PAGE> 70
state law. The most stringent state expense limitation applicable
to the Fund presently requires reimbursement of expenses in any
full fiscal year that such expenses (excluding certain expenses
as described above) exceed 2 1/2% of the first $30 million, 2%
of the next $70 million and 1 1/2% of the excess over $100 million
of the average value of the Fund's net assets in accordance with
California "blue sky" regulations.

The Manager has engaged Dreyfus to assist it in providing
certain administrative services for the Fund pursuant to a
Master Administration Agreement between the Manager and Dreyfus.
Pursuant to its agreement with Dreyfus, the Manager has agreed
to pay Dreyfus a monthly fee at the annual rate of .05 of 1% of the
value of the Fund's average daily net assets. During the year
ended June 30, 1994, $127,445 is payable to Dreyfus by the Manager
pursuant to the agreement.

However, the Manager had undertaken from June 1, 1993 to
November 30, 1993 to reduce the management fee paid by and
reimburse such excess expenses of the Fund, to the extent that
the Fund's aggregate expenses (excluding certain expenses
as described above) exceeded specified annual percentages of
the Fund's average daily net assets. The Manager has currently
undertaken from December 1, 1993 to assume all expenses of the
Fund in excess of an annual rate of .35 of 1% of the Fund's
average daily net assets. The reduction in management fee,
pursuant to the undertakings, amounted to $304,836, for the
year ended June 30, 1994.

The undertaking may be modified by the Manager from time to
time, provided that the resulting expense reimbursement would
not be less than the amount required pursuant to the Agreement.

(b) Certain officers and trustees of the Fund are "affiliated
persons," as defined in the Act, of the Manager and/or the
Distributor. Each trustee who is not an "affiliated person"
receives an annual fee of $1,500 and an attendance fee of $250
per meeting.

(c) On December 5, 1993, Dreyfus entered into an Agreement
and Plan of merger providing for the Merger of Dreyfus with a
subsidiary of Mellon Bank Corporation ("Mellon").

Following the merger, it is planned that Dreyfus will be a
direct subsidiary of Mellon Bank, N.A. Closing of this merger is
subject to a number of contingencies, including receipt of
certain regulatory approvals and approvals of the stockholders
of Dreyfus and of Mellon. The merger is expected to occur in August
1994, but could occur later.

B-45
<PAGE> 71
FIRST PRAIRIE CASH MANAGEMENT
REPORT TO ERNST & YOUNG LLP, INDEPENDENT AUDITORS

SHAREHOLDERS AND BOARD OF TRUSTEES
FIRST PRAIRIE CASH MANAGEMENT

We have audited the accompanying statement of assets and
liabilities of First Prairie Cash Management, including the
statement of investments, as of June 30, 1994, and the related
statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period
then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities
owned as of June 30, 1994 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of First Prairie Cash Management
at June 30, 1994, the results of its operations for the year
then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for
each of the indicated years, in conformity with generally accepted
accounting principles.

Ernst & Young LLP

New York, New York
August 3, 1994

B-46
<PAGE> 72
<TABLE>
<CAPTION>
FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
STATEMENT OF INVESTMENTS MAY 31, 1994
ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
U.S. TREASURY BILLS--75.6% PURCHASE AMOUNT VALUE
- --------------------------------------------------------------- ------------ ------------- -------------
<S> <C> <C> <C>

6/9/1994................................................... 3.52% $90,000,000 $ 89,930,333
6/23/1994.................................................. 3.10 45,000,000 44,915,988
7/7/1994................................................... 3.38 50,000,000 49,833,250
8/25/1994.................................................. 3.29 5,500,000 5,458,444
9/1/1994................................................... 4.28 25,000,000 24,729,750
9/22/1994.................................................. 3.45 5,000,000 4,947,424
11/17/1994................................................. 4.65 50,000,000 48,933,775
11/25/1994................................................. 4.73 25,000,000 24,431,510
12/15/1994................................................. 4.59 20,000,000 19,510,236
-------------
TOTAL U.S. TREASURY BILLS
(cost $312,690,710)........................................ $312,690,710
=============
U.S. GOVERNMENT AGENCIES--20.0%
- ---------------------------------------------------------------
Agency for International Development, Floating Rate Notes (a)
3/1/2008................................................... 5.08% $12,766,942 $ 12,820,953
1/1/2012................................................... 3.52 500,000 500,000
1/1/2018................................................... 4.03 12,500,000 12,772,366
7/1/2018................................................... 5.10 10,000,000 10,000,000
12/1/2018.................................................. 5.52 7,500,000 7,563,627
1/1/2021................................................... 4.51 25,000,000 25,000,000
7/1/2023................................................... 5.00 14,100,000 14,100,000
-------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $82,756,946)......................................... $ 82,756,946
=============
REPURCHASE AGREEMENT--5.1%
- ---------------------------------------------------------------
National Westminster Bank USA
dated 5/31/1994, due 6/1/1994 in the amount of $21,002,491
(fully collateralized by $22,430,000 U.S.
Treasury Notes 5.375%, due 5/31/1998, value $21,458,991)
(cost $21,000,000)......................................... 4.27% $21,000,000 $ 21,000,000
=============
TOTAL INVESTMENTS
(cost $416,447,656).............................. 100.7% $416,447,656
====== =============
LIABILITIES, LESS CASH AND RECEIVABLES............... (.7%) $ (2,813,685)
====== =============
NET ASSETS........................................... 100.0% $413,633,971
====== =============
<FN>
NOTE TO STATEMENT OF INVESTMENTS;
- --------------------------------------------------------------------------------------------------------------------
(a) Variable interest rate - subject to periodic change.
</TABLE>

See notes to financial statements.

B-47
<PAGE> 73
<TABLE>
<CAPTION>
FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
- --------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1994

ASSETS:
Investments in securities, at value--Note 1(a,b)........................ $416,447,656
Interest receivable..................................................... 1,499,083
Prepaid expenses........................................................ 58,191
--------------
418,004,930
LIABILITIES:
Due to The First National Bank of Chicago............................... $ 200,245
Due to Custodian........................................................ 4,053,934
Accrued expenses........................................................ 116,780 4,370,959
------------ -------------
NET ASSETS ................................................................ $413,633,971
=============
REPRESENTED BY:
Paid-in capital......................................................... $413,680,487
Accumulated net realized (loss) on investments.......................... (46,516)
------------
NET ASSETS at value applicable to 413,680,487 shares outstanding
(unlimited number of $.001 par value of Beneficial Interest authorized). $413,633,971
=============
NET ASSET VALUE, offering and redemption price per share
($413,633,971 / 413,680,487 shares)..................................... $1.00
=====
<CAPTION>
STATEMENT OF OPERATIONS YEAR ENDED MAY 31, 1994

<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 14,033,118
EXPENSES:
Management fee--Note 2(a)............................................. $1,478,021
Registration fees..................................................... 82,477
Custodian fees........................................................ 81,457
Prospectus and shareholders' reports.................................. 26,444
Professional fees..................................................... 41,336
Trustees' fees and expenses--Note 2(b)................................ 6,145
Miscellaneous......................................................... 43,644
------------
1,759,524
Less--reduction in management fee due to undertakings--Note 2(a)...... 477,943
------------
TOTAL EXPENSES.................................................. 1,281,581
-------------
INVESTMENT INCOME--NET...................................................... 12,751,537
NET REALIZED (LOSS) ON INVESTMENTS--NOTE 1(B)............................... (42,640)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 12,708,897
=============
<FN>
See notes to financial statements.
</TABLE>

B-48
<PAGE> 74
<TABLE>
<CAPTION>
FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
- -------------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS

YEAR ENDED MAY 31,
----------------------------------
OPERATIONS: 1993* 1994
---------------- ----------------
<S> <C> <C>

Investment income--net............................................... $ 5,009,723 $ 12,751,537
Net realized (loss) on investments................................... (3,877) (42,640)
---------------- ----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 5,005,846 12,708,897
---------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income--net............................................... (5,009,723) (12,751,537)
---------------- ----------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold........................................ 2,224,947,105 4,379,511,392
Dividends reinvested................................................. 101,156 563,903
Cost of shares redeemed.............................................. (1,960,617,531) (4,230,925,537)
---------------- ----------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS....... 264,430,730 149,149,758
---------------- ----------------
TOTAL INCREASE IN NET ASSETS................................... 264,426,853 149,107,118
NET ASSETS:
Beginning of year.................................................... 100,000 264,526,853
---------------- ----------------
End of year.......................................................... $ 264,526,853 $ 413,633,971

================ ================
<FN>
___________________
* From June 2, 1992 (commencement of operations) to May 31, 1993.

</TABLE>

FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for
a share of beneficial interest outstanding, total investment return,
ratios to average net assets and other supplemental data for each
year indicated. This information has been derived from the Fund's
financial statements.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
----------------------------------
PER SHARE DATA: 1993(1) 1994
---------------- ----------------
<S> <C> <C>
Net asset value, beginning of year................................... $1.0000 $1.0000
---------------- ----------------
Investment Operations:
Investment income--net............................................... .0319 .0302
Net realized (loss) on investments................................... -- (.0001)
---------------- ----------------
Total from Investment Operations............................... .0319 .0301
---------------- ----------------
Distributions;
Dividends from investment income--net................................ (.0319) (.0302)
---------------- ----------------
Net asset value, end of year......................................... $1.0000 $.9999
================ ================
TOTAL INVESTMENT RETURN.................................................. 3.25%(2) 3.06%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............................. .02%(2) .30%
Ratio of net investment income to average net assets................. 3.10%(2) 3.02%
Decrease reflected in above expenses ratios due to
undertakings by the Manager........................................ .47%(2) .11%
Net Assets, end of year (000's omitted).............................. $264,527 $413,634

<FN>
- -------------------------
(1) From June 2, 1992 (commencement of operations) to May 31, 1993.
(2) Annualized.
</TABLE>

B-49
<PAGE> 75

FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
NOTES TO FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:

The Fund is registered under the Investment Company Act of
1940 ("Act") as a diversified open-end management investment
company. The First National Bank of Chicago ("Manager") serves as the
Fund's investment adviser. The Dreyfus Corporation ("Dreyfus")
provides certain administrative services to the Fund-see Note
2(a). Dreyfus Service Corporation ("Distributor"), a
wholly-owned subsidiary of Dreyfus, acts as the exclusive distributor
of the Fund's shares, which are sold without a sales charge.

(a) PORTFOLIO VALUATION: Investments are valued at amortized
cost, which has been determined by the Fund's Board of Trustees
to represent the fair value of the Fund's investments.

(b) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis.
Realized gain and loss from securities transactions are recorded
on the identified cost basis. Interest income is recognized on
the accrual basis. Cost of investments represents amortized cost.

The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager,
subject to the seller's agreement to repurchase and the Fund's
agreement to resell such securities at a mutually agreed upon
price. Securities purchased subject to repurchase agreements are
deposited with the Fund's custodian and, pursuant to the terms
of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued
interest at all times. If the value of the underlying securities
falls below the value of the repurchase price plus accrued interest,
the Fund will require the seller to deposit additional collateral
by the next business day. If the request for additional collateral
is not met, or the seller defaults on its repurchase obligation, the
Fund maintains the right to sell the underlying securities at market
value and may claim any resulting loss against the seller.

(c) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund
to declare dividends daily from investment income-net. Such
dividends are paid monthly. Dividends from net realized capital

B-50
<PAGE> 76
gain, if any, are normally declared and paid annually, but the
Fund may make distributions on a more frequent basis to comply with
the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the Fund not to
distribute such gain.

(d) FEDERAL INCOME TAXES: It is the policy of the Fund to
continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by
complying with the applicable provisions of the Internal Revenue
Code, and to make distributions of taxable income sufficient to
relieve it from substantially all, Federal income taxes.

The Fund has an unused capital loss carryover of
approximately $7,000 available for Federal income tax purposes
to be applied against future net securities profits, if any realized
subsequent to May 31, 1994. The carryover does not include net
realized securities losses from November 1, 1993 through May 31, 1994
which are treated, for Federal income tax purposes, as arising
in fiscal 1995. If not applied, the carryover expires in fiscal
2002.

At May 31, 1994, the cost of investments for Federal income
tax purposes was substantially the same as the cost for
financial reporting purposes (see the Statement of Investments).

B-51
<PAGE> 77
FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
- ----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:

(a) Pursuant to a management agreement ("Agreement") with
the Manager, the management fee is computed at the annual rate of
.35 of 1% of the average daily value of the Fund's net assets and is
payable monthly. The Agreement further provides that if in any
full fiscal year the aggregate expenses of the Fund exclusive of
taxes, brokerage, interest on borrowings and extraordinary
expenses, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the
payments to be made to the Manager, or the Manager will bear such
excess to the extent required by state law. The most stringent
state expense limitation applicable to the Fund presently requires
reimbursement of expenses in any full fiscal year that such
expenses (excluding certain expenses as described above) exceed
2 1/2% of the first $30 million, 2% of the next $70 million and
1 1/2% of the excess over $100 million of the average value of
the Fund's net assets in accordance with California "blue sky"
regulations.

However, the Manager had undertaken from June 1, 1993 to
November 30, 1993 to reduce the management fee paid by and
reimburse such excess expenses of the Fund, to the extent that
the Fund's aggregate expenses (excluding certain expenses as
described above) exceeded specified annual percentages of the
Fund's average daily net assets. The Manager has currently
undertaken from December 1, 1993 to assume all expenses of the
Fund in excess of an annual rate of .35 of 1% of the Fund's
average daily net assets. The reduction in management fee,
pursuant to the undertakings, amounted to $477,943 for the year
ended May 31, 1994.

The undertaking may be modified by the Manager from time to
time, provided that the resulting expense reimbursement would
not be less than the amount required pursuant to the Agreement.

(b) Certain officers and trustees of the Fund are
"affiliated persons," as defined in the Act, of the Manager
and/or the Distributor. Each trustee who is not an "affiliated
person" receives an annual fee of $1,500 and an attendance fee of $250
per meeting.

B-52
<PAGE> 78
(c) On December 5, 1993, Dreyfus entered into an Agreement
and Plan of Merger providing for the merger of Dreyfus with a
subsidiary of Mellon Bank Corporation ("Mellon").

B-53
<PAGE> 79
FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
- ---------------------------------------------------------
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS

SHAREHOLDERS AND BOARD OF TRUSTEES
FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT

We have audited the accompanying statement of assets and
liabilities of First Prairie U.S. Treasury Securities Cash
Management, including the statement of investments, as of May
31, 1994, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of
the two years in the period then ended, and financial highlights
for each of the years indicated therein. These financial statements
and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements and financial highlights are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of May 31, 1994 by correspondence with the
custodian and others. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of First Prairie U.S. Treasury
Securities Cash Management at May 31, 1994, the results of its
operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.

ERNST & YOUNG
New York, New York
June 30, 1994

B-54
<PAGE> 80
Prairie Institutional Funds
Cash Management Fund

<TABLE>
<CAPTION>
Portfolio of Investments
April 30, 1995 (Unaudited)

Ratings Principal
Moody's/ Maturity Amount Value
Description S&P Rate Date (000) (Note 2(a))
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS - 98.5%
Commercial Paper - 48.6%
Banking - 9.4%
Barclays U.S. Funding Corp. A-1-/P-1 5.94% 6/15/1995 $ 10,000 $ 9,925,750
Canadian Imperial Holdings A-1-/P-1 5.99% 5/15/1995 10,000 9,976,706
Toronto Dominion Holdings A-1-/P-1 6.14% 5/03/1995 10,000 9,996,589
29,899,045

Brokerage - 3.1%
Morgan Stanley Group, Inc. A-1-/P-1 5.98% 6/19/1995 10,000 9,918,605

Chemicals - 3.1%
Du Pont Corp. A-1-/P-1 5.99% 6/27/1995 10,000 9,905,158

Communications Equipment and
Services - 3.1%
AT&T Corp. A-1-/P-1 6.12% 5/05/1995 10,000 9,993,200

Finance - 22.1%
Asset Securitization
Cooperative Corp. A-1-/P-1 5.98% 6/13/1995 9,000 8,935,715
Barton Capital Corp. A-1-/P-1 6.08% 6/28/1995 6,360 6,297,700
Enterprise Funding Corp. A-1-/P-1 6.06% 6/06/1995 10,000 9,939,400
Greenwich Asset Funding, Inc. A-1-/P-1 6.10% 7/06/1995 10,000 9,888,167
Kubota Finance U.S.A., Inc. A-1-/P-1 6.06% 5/16/1995 10,000 9,974,750
New Center Asset Trust A-1-/P-1 6.13% 5/03/1995 10,000 9,996,594
Ryobi Finance Corp. A-1-/P-1 6.00% 5/16/1995 7,400 7,381,500
Triple-A One Plus Funding A-1-/P-1 6.05% 6/01/1995 8,000 7,958,322
70,372,148

Manufacturing - 1.6%
Hanson Finance UK PLC A-1-/P-1 6.08% 7/06/1995 5,000 4,944,267

Real Estate Development - 3.1%
SRD Finance, Inc. A-1-/P-1 6.03% 5/11/1995 10,000 9,983,250

Travel Services - 3.1%
Accor SA A-1-/P-1 6.07% 5/23/1995 10,000 9,962,906

Total Commercial Paper
(amortized cost $154,978,579) 154,978,579

Certificates of Deposit - 25.1%
U.S. Branches of Foreign Banks - 25.1%
ABN-Amro Bank, N.V. Chicago A-1-/P-1 6.12% 5/16/1995 10,000 10,000,016
Bayerische Landesbank A-1-/P-1 6.17% 7/05/1995 10,000 10,000,711
Commerzbank A-1-/P-1 6.31% 5/12/1995 10,000 10,000,060
Industrial Bank of Japan Ltd.,
New York A-1-/P-1 6.18% 7/31/1995 10,000 10,000,743
Mitsubishi Bank Ltd.,
New York A-1-/P-1 6.05% 6/20/1995 10,000 10,000,000
</TABLE>

See Notes to Financial Statements.

B-55
<PAGE> 81
<TABLE>
<CAPTION>
Ratings Principal
Moody's/ Maturity Amount Value
Description S&P Rate Date (000) (Note 2(a))
<S> <C> <C> <C> <C> <C>
National Westminster Bank PLC A-1-/P-1 6.35% 5/19/1995 $ 10,000 $ 10,001,110
Royal Bank of Canada* A-1-/P-1 6.18% 10/16/1995 10,000 10,000,438
Societe Generale, New York A-1-/P-1 6.30% 5/02/1995 10,000 10,000,008

Total Certificates of Deposit
(amortized cost $80,003,086) 80,003,086

U.S. Government Agency Notes - 7.9%
Student Loan Marketing
Association* Aaa/NR
(amortized cost $25,000,000) 4.95% 6/08/1995 25,000 25,000,000

Bankers Acceptance - 4.1%
Dai-Ichi Kangyo Bank Ltd.,
New York A-1-/P-1 6.16% 5/30/1995 4,300 4,278,662
Fuji Bank Ltd., New York A-1-/P-1 6.28% 5/31/1995 3,000 2,984,300
Sakura Bank Ltd., Seattle A-1-/P-1 6.18% 5/01/1995 5,900 5,900,000

Total Bankers Acceptance
(amortized cost $13,162,962) 13,162,962

Corporate Notes - 3.1%
Brokerage - 3.1%
Merrill Lynch & Co. Inc.*
(amortized cost $10,000,000) A-1-/P-1 5.99% 6/07/1995 10,000 10,000,000

Total Investment in Securities
(amortized cost $283,144,627) 283,144,627

Repurchase Agreements - 9.7%
Repurchase agreement with
Barclays Bank,
dated 4/28/1995, with a
maturity value of
$10,705,305
(See Footnote A) 5.95% 5/01/1995 10,700 10,700,000
Repurchase agreement with
National Westminster Bank,
dated 4/28/1995, with a
maturity value of
$20,009,883
(See Footnote B) 5.93% 5/01/1995 20,000 20,000,000

Total Repurchase Agreements
(amortized cost $30,700,000) 30,700,000

Total Investments
(amortized cost
$313,844,627) - 98.5% 313,844,627
Other assets in excess of
liabilities - 1.5% 4,753,886

TOTAL NET ASSETS - 100.0% $318,598,513

<FN>
Note: S&P and Moody's ratings have been used for consistency. May be rated by other services as well.
Variable rate security. Interest rates are stated as of April 30,1995. Maturity date
reflects the later of the next interest rate change date or the next put date.
Illiquid securities.

Footnote A Collateralized by $10,208,000 U.S. Treasury Bond, 5.95%, due 5/15/1995; with a value of
$10,817,377.

Footnote B Collateralized by $20,000,000 U.S. Treasury Note, 5.93%, due 2/29/1996; with a value of
$20,434,240.

See Notes to Financial Statements.
</TABLE>

B-56
<PAGE> 82
<TABLE>
<CAPTION>
Prairie Institutional Funds
U.S. Government Securities Cash Management Fund
Portfolio of Investments
April 30,1995 (Unaudited)

Principal
Maturity Amount Value
Description Rate Date (000) (Note 2(a))
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS - 100.5%
U.S. Government Agency Notes - 61.8%
Federal Farm Credit Bank, Discount Note 6.04% *6/16/1995 15,000 $ 14,885,958
Federal Farm Credit Bank, Discount Note 5.98% *5/04/1995 10,000 9,995,067
Federal Home Loan Bank, Discount Note 6.04% *6/19/1995 30,000 29,757,042
Federal Home Loan Bank, Discount Note 5.98% *7/11/1995 10,000 9,883,639
Federal Home Loan Bank, Discount Note 5.94% *7/20/1995 22,125 21,836,883
Federal Home Loan Mortgage Corp.,
Discount Note 6.09% *5/03/1995 20,000 19,993,256
Federal Home Loan Mortgage Corp.,
Discount Note 6.03% *6/19/1995 10,000 9,919,014
Federal Home Loan Mortgage Corp.,
Discount Note 6.02% *5/17/1995 19,380 19,328,837
Federal Home Loan Mortgage Corp.,
Discount Note 6.02% *5/19/1995 20,150 20,090,255
Federal Home Loan Mortgage Corp.,
Discount Note 6.00% *6/09/1995 10,427 10,360,015
Federal Home Loan Mortgage Corp.,
Discount Note 5.97% *5/02/1995 20,000 19,996,711
Federal Home Loan Mortgage Corp.,
Discount Note 5.99% *7/12/1995 20,000 19,763,600
Federal National Mortgage Association,
Discount Note 6.04% *5/12/1995 30,000 29,945,458
Federal National Mortgage Association,
Discount Note 6.10% *8/24/1995 18,800 18,442,069
Federal National Mortgage Association,
Discount Note 5.99% *7/14/1995 25,000 24,696,805
Federal National Mortgage Association,
Discount Note 5.97% *7/26/1995 20,000 19,718,589
Federal National Mortgage Association,
Discount Note 5.96% *7/24/1995 20,000 19,726,067

Total U.S. Government Agency Notes
(amortized cost $318,339,265) 318,339,265

Repurchase Agreements - 38.7%
Repurchase agreement with Barclays Bank,
dated 4/28/1995, with a maturity value
of $14,207,041 (See Footnote A) 5.95% 5/01/1995 14,200 14,200,000
Repurchase agreement with National
Westminster Bank, dated 4/28/1995,
with a maturity value of $95,046,946
(See Footnote B) 5.93% 5/01/1995 95,000 95,000,000
Repurchase agreement with Fuji Bank,
dated 4/28/1995, with a maturity value
of $90,044,400 (See Footnote C) 5.92% 5/01/1995 90,000 90,000,000

Total Repurchase Agreements
(amortized cost $199,200,000) 199,200,000

Total Investments
(amortized cost
$517,539,265) - 100.5% $517,539,265
Liabilities in excess of other
assets - (0.5%) (2,458,006)
TOTAL NET ASSETS - 100.0% $515,081,259
<FN>
Note: S&P and Moody's ratings have been used for consistency. May be rated by other services as well.
*Yield at purchase.
</TABLE>

See Notes to Financial Statements.

<PAGE> 83
<TABLE>
<CAPTION>
Footnotes to Repurchase Agreements:
<S> <C>
Footnote A Collateralized by $13,550,000 U.S. Treasury Bond, due 5/15/1995; with a value of $14,345,331.
Footnote B Collateralized by $95,890,000 U.S. Treasury Notes with maturities ranging from 12/31/1998
through 2/15/2001; with an aggregate value of $96,959,919.
Footnote C Collateralized by $85,670,000 U.S. Treasury Notes with maturities ranging from 12/31/1999
through 2/15/2000; with an aggregate value of $91,879,678.
</TABLE>
See Notes to Financial Statements.

B-58
<PAGE> 84
<TABLE>
<CAPTION>
Prairie Institutional Funds
Treasury Prime Cash Management Fund
Portfolio of Investments
April 30,1995 (Unaudited)

Principal
Maturity Amount Value
Description Rate Date (000) (Note 2(a))
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 100.7%
U.S. Treasury Bills - 100.7%
U.S. Treasury Bill 5.71% 5/11/1995 $ 1,275 $ 1,272,990
U.S. Treasury Bill 5.65% 5/18/1995 847 844,748
U.S. Treasury Bill 5.56% 6/01/1995 3,200 3,184,762
U.S. Treasury Bill 5.55% 6/15/1995 3,400 3,376,625
U.S. Treasury Bill 5.50% 6/08/1995 5,000 4,971,310

Total Investments
(amortized cost
$13,650,435) - 100.7% 13,650,435
Liabilities in excess of other
assets - (0.7%) (87,836)
TOTAL NET ASSETS - 100.0% $13,562,599
<FN>
* Discount yield.
See Notes to Financial Statements.
</TABLE>

B-59
<PAGE> 85
<TABLE>
<CAPTION>
Prairie Institutional Funds
Statement of Assets and Liabilities
April 30,1995 (Unaudited)

Cash U.S. Government Treasury Prime
Management Securities Cash Cash Management
Fund Management Fund Fund
<S> <C> <C> <C>

ASSETS:
Investments in securities, at value
(amortized cost $283,144,627, $318,339,265 $ 283,144,627 $ 318,339,265 $ 13,650,435
and $13,650,435, respectively)
Repurchase Agreements, at value
(amortized cost $30,700,000,
$199,200,000 and $0, respectively) 30,700,000 199,200,000 -
Receivable for investment securities sold 6,303,670 - -
Receivable from adviser - - 13,295
Interest receivable 1,401,981 98,194 -
Deferred organization costs and prepaid
expenses 112,615 121,639 62,879
Total Assets 321,662,893 517,759,098 13,726,609

LIABILITIES:
Advisory fees payable 86,647 217,377 -
Administration fees payable 56,976 91,739 866
12b-1 fees payable (Service Shares) 45 2,363 17
Bank overdraft 97,035 105,108 35,415
Dividends payable 1,433,928 2,129,128 68,535
Payable for investment
securities purchased 1,319,535 - -
Accrued legal fees 14,672 25,336 320
Accrued Trustees' fees 520 520 200
Other accrued expenses 55,022 106,268 58,657
Total Liabilities 3,064,380 2,677,839 164,010

NET ASSETS $ 318,598,513 $ 515,081,259 $ 13,562,599

Shares Outstanding (no par value, unlimited
number of shares authorized)
Institutional Shares 317,200,762 505,372,644 13,010,510
Service Shares 1,595,609 10,242,276 552,992
Total Shares Outstanding 318,796,371 515,614,920 13,563,502

Net Asset Value, Offering Price and
Redemption Price per Share $ 1.00 $1.00 $ 1.00

COMPOSITION OF NET ASSETS:
Paid-in capital $ 318,796,371 $ 515,614,920 $ 13,563,502
Accumulated net realized losses (197,858) (533,661) (903)
NET ASSETS, April 30,1995 $ 318,598,513 $ 515,081,259 $ 13,562,599
</TABLE>

See Notes to Financial Statements.

B-60
<PAGE> 86
Prairie Institutional Funds
Statement of Operations
For the period ended April 30,1995 (Unaudited)

<TABLE>
<CAPTION>
Cash U.S. Government Treasury Prime
Management Securities Cash Cash Management
Fund (1) Management Fund (2) Fund (3)
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest Income $ 12,254,435 $ 22,575,626 $ 108,129
Expenses:
Advisory fees 678,287 1,300,324 3,822
Administration fees 126,206 214,569 2,866
12B-1 fees (Service Shares) 45 2,363 17
Custodian fees
and expenses 50,810 69,854 6,113
Registration fees 37,741 70,124 955
Legal fees 27,851 37,443 320
Audit fees 21,832 35,978 4,360
Transfer agent fees and expenses 14,317 7,392 2,320
Reports to shareholders 10,125 7,781 2,600
Trustees' fees 4,303 4,835 200
Miscellaneous expenses 55,287 39,940 1,987
1,026,804 1,790,603 25,560
Less: Fee waivers and
expense reimbursements (206,478) (274,965) (18,894)
820,326 1,515,638 6,666
Net Investment Income 11,434,109 21,059,988 101,463

REALIZED LOSS ON INVESTMENTS:
Net realized loss
on investments (1,706,625) (487,145) (903)

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $9,727,484 $ 20,572,843 $ 100,560

<FN>
(1) For the period July 1,1994 through April 30,1995. Includes Service Shares for the period
January 17,1995 (initial offering date of Service Shares) through April 30,1995
(2) For the period June 1,1994 through April 30,1995. Includes Service Shares for the period
January 17,1995 (initial offering date of Service Shares) through April 30,1995.
(3) For the period March 22,1995 (commencement of operations) through April 30,1995.

</TABLE>

See Notes to Financial Statements.

B-61
<PAGE> 87
<TABLE>
<CAPTION>
Prairie Institutional Funds
Statement of Changes in Net Assets

Cash Management Fund
For the period ended
April 30,1995(1) For the year ended
[Unaudited] June 30,1994
<S> <C> <C>
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income $ 11,434,109 $ 8,493,966
Net realized loss on investments (1,706,625) (136,023)
Net Increase In Net Assets Resulting From Operations 9,727,464 8,357,943

DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Institutional Shares (11,432,887) (8,493,966)
Service Shares (1,222) -

Total Dividends to Shareholders from
Net Investment Income (11,434,109) (8,493,966)

FUND SHARE TRANSACTIONS (at $1.00 per Share):
Net proceeds from shares sold:
Institutional Shares 1,125,650,616 2,167,517,783
Service Shares 1,595,469
Dividends reinvested:
Institutional Shares 942,130 654,107
Service Shares 140 -
cost of shares redeemed:
Institutional Shares (1,053,371,641) (2,099,928,742)
Service Shares - -

Net Increase In Net Assets From Fund Shares
Transactions 74,816,714 68,243,146

Increase due to capital contribution from
investment adviser (Note 4) 1,668,500 -

Total Increase in Net Assets 74,778,589 68,107,125

Net Assets:
Beginning of period 243,819,924 175,712,799
End of period $ 318,598,513 $ 243,819,924

<FN>
(1) For the period July 1,1994 through April 30,1995. Includes Service Shares for the period
January 17,1995 (initial offering date of Service Shares) through April 30,1995

See Notes to Financial Statements.
</TABLE>

B-62
<PAGE> 88
<TABLE>
<CAPTION>
Prairie Institutional Funds
Statement of Changes in Net Assets

U.S. Government Securities Cash Management Fund
For the period ended
April 30,1995(1) For the year ended
[Unaudited] May 31,1994

<S> <C> <C>
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income $ 21,059,988 $ 12,751,537
Net realized loss on investments (487,145) (42,640)
Net Increase In Net Assets
Resulting From Operations 20,572,843 12,708,897

DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT
INCOME:
Institutional Shares (21,006,957) (12,751,537)
Service Shares (53,031) -
Total Dividends to Shareholders from
Net Investment Income (21,059,988) (12,751,537)

FUND SHARE TRANSACTIONS (at $1.00 per Share):
Net proceeds from shares sold:
Institutional Shares 3,038,532,256 4,379,511,392
Service Shares 17,024,835 -
Dividends reinvested:
Institutional Shares 1,593,272 563,903
Service Shares 139 -
Cost of shares redeemed:
Institutional Shares (2,948,433,371) (4,230,925,537)
Service Shares (6,782,698) _
Net Increase In Net Assets
From Fund Shares Transactions 101,934,433 149,149,758
Total Increase in Net Assets 101,447,288 149,107,118

Net Assets:
Beginning of period 413,633,971 264,526,853
End of period $ 515,081,259 $ 413,633,971

<FN>
(1) For the period June 1,1994 through April 30,1995. Includes Service Shares for the period
January 17,1995 (initial offering date of Service Shares) through April 30,1995.

</TABLE>
See Notes to Financial Statements.

B-63
<PAGE> 89
<TABLE>
<CAPTION>
Prairie Institutional Funds
Statement of Changes in Net Assets (unaudited)
Treasury Prime
Cash Management Fund
For the period ended
April 30,1995(1)
<S> <C>

INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income $ 101,463
Net realized loss on investments (903)
Net Increase In Net Assets Resulting From Operations 100,560

DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Institutional Shares (98,003)
Service Shares (3,460)
Total Dividends to Shareholders from Net Investment Income (101,463)

FUND SHARE TRANSACTIONS (at $1.00 per Share):
Net proceeds from shares sold:
Institutional Shares 29,314,728
Service Shares 543,891
Dividends reinvested:
Institutional Shares 26,977
Service Shares 21
Cost of shares redeemed:
Institutional Shares (16,356,194)
Service Shares (3,420)
Net Increase In Net Assets From Fund Shares Transactions 13,526,003
Total Increase in Net Assets 13,525,100

Net Assets:
Beginning of period 37,499
End of period $ 13,562,599

(1) For the period March 22,1995 (commencement of operations) through April 30,1995.
</TABLE>
See Notes to Financial Statements.

B-64
<PAGE> 90
<TABLE>
<CAPTION>
Prairie Institutional Funds
Financial Highlights

Contained below is per share operating performance data for a share of beneficial interest
outstanding, total investment returns, ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from information provided in the Fund's financial
statements.

Cash Management Fund
For the period ended
April 30,1995(2) For the year ended For the period ended
(Unaudited) June 30,1994 June 30,1993(1)
<S> <C> <C> <C>

PER SHARE DATA:
Institutional Shares:
Net asset value per share, beginning of period $ 1.00 $1.00 $ 1.00
Income from Investment Operations:
Net investment income 0.0412 0.0333 0.0297
Net realized loss on investments (0.0059) (0.0006) (0.0001)
Total from Investment Operations 0.0353 0.0327 0.0296

Less dividends from net investment income (0.0412) (0.0333) (0.0297)
Increase due to voluntary capital contribution from
investment adviser (Note 4) 0.0060 ____ _______
Net change in net asset value per share 0.0001 (0.0006) (0.0001)
Net asset value per share, end of period $ 1.00 $1.00 $ 1.00

TOTAL INVESTMENT RETURN (4) 4.20% 3.38% 3.25%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 0.35% (3) 0.31% 0.05% (3)
Ratio of net investment income to average net assets 4.94% (3) 3.33% 3.19% (3)
Decrease reflected in above expense ratios due to
fee waivers and expense reimbursements 0.09% (3) 0.12% 0.51% (3)
Net Assets, end of year (000's Omitted) $ 317,004 $ 243,820 $ 175,713
<FN>
(1) For the period July 30,1992 (commencement of operations) through June 30,1993.
(2) For the period July 1,1994 through April 30,1995.
(3) Annualized.
(4) Total return figures provided are not annualized and do not include the effect of the voluntary
capital contribution from the investment adviser (see Note 4 to Financial Statements).
Without this capital contribution, the total return would have been lower.
</TABLE>

See Notes to Financial Statements.

B-65
<PAGE> 91
Prairie Institutional Funds
Financial Highlights (Unaudited)

<TABLE>
<CAPTION>
Cash Management Fund
For the period ended
April 30, 1995(1)
<S> <C>
PER SHARE DATA:
Service Shares:
Net asset value per share, beginning of period $ 1.00
Income from Investment Operations:
Net investment income 0.0154
Net realized loss on investments (0.0006)
Total from Investment Operations 0.0148

Less dividends from net investment income (0.0154)
Net change in net asset value per share (0.0006)
Net asset value per share, end of period $ 1.00

TOTAL INVESTMENT RETURN 1.55% (2)

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 0.60% (3)
Ratio of net investment income to average net assets 5.47% (3)
Decrease reflected in above expense ratios due to
fee waivers and expense reimbursements 0.11% (3)
Net Assets, end of year (000's Omitted) $ 1,595

<FN>
(1) For the period January 17,1995 (initial offering date of Service Shares) through April 30,1995.
(2) Not annualized.
(3) Annualized.

</TABLE>
See Notes to Financial Statements.

B-66
<PAGE> 92
Prairie Institutional Funds
Financial Highlights
Contained below is per share operating performance data
for a share of beneficial interest outstanding, total investment
returns, ratios to average net assets and other supplemental data
for each period indicated. This information has been derived from
information provided in the Fund's financial
statements.
<TABLE>
<CAPTION>
U.S. Government Securities Cash Management Fund
For the period ended
April 30,1995(2) For the year ended For the period ended
(Unaudited) May 31, 1994 May 31, 1993 (1)
<S> <C> <C> <C>
PER SHARE DATA:
Institutional Shares:
Net asset value per share, beginning of period $ 1.00 $1.00 $ 1.00
Income from Investment Operations:
Net investment income 0.0440 0.0302 0.0319
Net realized loss on investments (0.0009) (0.0001) ______
Total from Investment Operations 0.0431 0.0301 0.0319

Less dividends from net investment income (0.0440) (0.0302) (0.0319)
Net change in net asset value per share (0.0009) (0.0001) ____
Net asset value per share, end of period $ 1.00 $1.00 $ 1.00

TOTAL INVESTMENT RETURN 4.52% (4) 3.06% 3.25% (4)

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 0.35% (3) 0.30% 0.02% (3)
Ratio of net investment income to average
net assets 4.85% (3) 3.02% 3.10% (3)
Decrease reflected in above expense ratios
due to fee waivers and expense
reimbursements 0.06% (3) 0.11% 0.47% (3)
Net Assets, end of year (000's Omitted) $ 504,850 $ 413,634 $ 264,527

<FN>
(1) For the period June 2,1992 (commencement of operations) through May 31,1993.
(2) For the period June 1,1994 through April 30,1995.
(3) Annualized.
(4) Not annualized.
</TABLE>
See Notes to Financial Statements.

B-67
<PAGE> 93
<TABLE>
<CAPTION>
Prairie Institutional Funds
Financial Highlights (unaudited)

Contained below is per share operating performance data for a share of beneficial interest
outstanding, total investment return, ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from information provided in the Fund's financial
statements.
U.S. Government Securities
Cash Management Fund
For the period ended
April 30,1995 (1)
<S> <C>
PER SHARE DATA:
Service Shares:
Net asset value per share, beginning of period $ 1.00
Income from Investment Operations:
Net investment income 0.0153
Net realized loss on investments (0.0010)
Total from Investment Operations 0.0143

Less dividends from net investment income (0.0153)
Net change in net asset value per share (0.0010)
Net asset value per share, end of period $ 1.00

TOTAL INVESTMENT RETURN 1.54% (3)

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 0.60% (2)
Ratio of net investment income to average net assets 5.43% (2)
Decrease reflected in above expense ratios due to
fee waivers and expense reimbursements 0.08% (2)
Net Assets, end of year (000's Omitted) $ 10,232

<FN>
(1) For the period January 17,1995 (commencement of operations) through April 30,1995.
(2) Annualized.
(3) Not annualized.
</TABLE>
See Notes to Financial Statements.

B-68
<PAGE> 94
<TABLE>
<CAPTION>
Prairie Institutional Funds
Financial Highlights (Unaudited)

Treasury Prime
Cash Management Fund
For the period ended
April 30,1995(1)
<S> <C>
PER SHARE DATA:
Institutional Shares:
Net asset value per share, beginning of period $ 1.00
Income from Investment Operations:
Net investment income 0.0058
Net realized loss on investments (0.0001)
Total from Investment Operations 0.0057

Less dividends from net investment income (0.0058)
Net change in net asset value per share (0.0001)
Net asset value per share, end of period $ 1.00

TOTAL INVESTMENT RETURN 0.58% (2)

Ratio of expenses to average net assets 0.35% (3)
Ratio of net investment income to average net assets 5.31% (3)
Decrease reflected in above expense ratios due to
fee waivers and expense reimbursements 0.98% (3)
Net Assets, end of year (000's Omitted) $ 13,010

<FN>
(1) For the period March 22,1995 (commencement of operations) through April 30,1995.
(2) Not Annualized.
(3) Annualized.
</TABLE>
See Notes to Financial Statements.

B-69
<PAGE> 95
<TABLE>
<CAPTION>
Prairie Institutional Funds
Financial Highlights (Unaudited)

Treasury Prime
Cash Management Fund
For the period ended
April 30, 1995 (1)
<S> <C>
PER SHARE DATA:
Service Shares:
Net asset value per share, beginning of period $ 1.00
Income from Investment Operations:
Net investment income 0.0055
Net realized loss on investments (0.0001)
Total from Investment Operations 0.0054

Less dividends from net investment income (0.0055)
Net change in net asset value per share (0.0001)
Net asset value per share, end of period $ 1.00

TOTAL INVESTMENT RETURN 0.55% (2)

RATIO/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 0.60% (3)
Ratio of net investment income to average net assets 5.01% (3)
Decrease reflected in above expense ratios due to
fee waivers and expense reimbursements 0.98% (3)
Net Assets, end of year (000's Omitted) $ 553
<FN>
(1) For the period March 22,1995 (commencement of operations) through April 30,1995.
(3) Not Annualized.
(3) Annualized.
</TABLE>
See Notes to Financial Statements.

B-70
<PAGE> 96
PRAIRIE INSTITUTIONAL FUNDS
Notes to Financial Statements (Unaudited)

Note 1 - General

Prairie Institutional Funds (the "Fund") is registered under the
Investment Company Act of 1940 (the "Act") as an open-end management
investment company. At April 30, 1995, the Fund was comprised
of four investment portfolios as follows: Cash Management Fund,
Municipal Cash Management Fund, Treasury Prime Cash Management Fund
and U.S. Government Securities Cash Management Fund. The accompanying
financial statements relate only to the Cash Management Fund, U.S.
Government Securities Cash Management Fund and Treasury Prime Cash
Management Fund (collectively, the "Portfolios").

At a shareholder meeting of the First Prairie Cash Management
Fund and the First Prairie U.S. Treasury Securities Cash
Management Fund held on December 21, 1994, the shareholders approved
an Agreement and Plan of Exchange pursuant to which each of
these funds transferred all of their assets and liabilities to the
Cash Management Fund and the U.S. Government Securities Cash
Management Fund, respectively. In exchange for the assets and
liabilities, each Portfolio issued Institutional Shares to the
shareholders of the respective funds equal in value to shares
held by such shareholders immediately prior to the exchange.
This exchange took place on January 17, 1995 at which
time the shareholders of the First Prairie Cash Management Fund
received 263,124,343 Institutional Shares of the Cash Management Fund
having a net asset value of $262,954,610 while the shareholders
of the First Prairie U.S. Treasury Securities Cash Management
Fund received 431,159,110 Institutional Shares of the U.S. Government
Securities Cash Management Fund having a net asset value of
$430,731,675.

In addition to the above described transaction, a new investment
adviser, administrator and distributor were appointed by the Board
of Trustees effective January 17, 1995. On that date, First Chicago
Investment Management Company ("FCIMCO"), a wholly-owned
subsidiary of The First National Bank of Chicago ("First Chicago")
was named investment adviser and administrator to the Fund.
Prior to January 17, 1995, First Chicago served as investment
adviser and The Dreyfus Corporation ("Dreyfus") served as administrator.
In addition, on January 17, 1995, Concord Financial Group, Inc.
(the "Distributor"), a wholly-owned subsidiary of Concord Holding
Corporation ("Concord"), was named principal underwriter and distributor
of the Fund's shares. For the period July 1, 1994 through August 24,
1994, Dreyfus Service Corporation (the "former Distributor"), a
wholly-owned subsidiary of Dreyfus, acted as principal underwriter and
distributor of the Fund's shares. Effective August 24, 1994, Dreyfus
became a direct subsidiary of Mellon Bank, N.A. As such, effective
August 24, 1994, Premier Mutual Fund Services, Inc. ("Premier"), a
wholly-owned subsidiary of Institutional Administration Services, Inc.,
whose parent company is Boston Institutional Group, Inc., became and
served as principal underwriter and distributor of the Fund's
shares through January 16, 1995.

The Portfolios each offer two classes of shares -- Institutional
Shares and Service Shares. Institutional Shares and Service Shares
are substantially the same except that Service Shares bear the fees payable
under a Service Plan adopted pursuant to Rule 12b-1 under the
Act at an annual rate of 0.25% of the average daily net assets of the
outstanding Service Shares.

B-71
<PAGE> 97
Note 2 - Significant Accounting Policies

It is the policy of each Portfolio to maintain a continuous net
asset value per share of $1.00; each Portfolio has adopted certain
investment, portfolio valuation and dividend and distribution policies to
enable it to do so.

(a) Portfolio valuation: Investments are valued at amortized
cost, which has been determined by the Fund's Board of Trustees
to represent the fair value of each Portfolio's investments.

(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain
and loss from securities transactions are recorded on the
identified cost basis. Interest income is recognized on the accrual
basis. Cost of investments represent amortized cost.

(c) Dividends to shareholders: It is the policy of each
Portfolio to declare dividends daily from investment income-net.
Such dividends are paid monthly. Dividends from net realized
capital gain, if any, are normally declared and paid annually,
but each Portfolio may make distributions on a more frequent
basis to comply with the distribution requirements of the
Internal Revenue Code. To the extent that net realized capital
gain can be offset by capital loss carryovers, it is the policy
of each Portfolio not to distribute such gain.

(d) Federal income taxes: It is the policy of each Portfolio
to continue to qualify as a regulated investment company, if such
qualification is in the best interest of its shareholders, by
complying with the provisions available to certain investment
companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of taxable income
sufficient to relieve it from all, or substantially all, Federal
income taxes.

The Cash Management Fund and the U.S. Government Securities Fund
have unused capital loss carryovers of approximately $19,000 and
$7,000, respectively, available for Federal income tax purposes
to be applied against future net securities profits, if any
realized subsequent to June 30, 1994 for the Cash Management Fund
and May 31, 1994 for the U.S. Government Securities Fund. These
carryovers do not include net realized securities losses from
November 1, 1993 through June 30, 1994 for the Cash Management
Fund and from November 1, 1993 through May 31, 1994 for the
U.S. Government Securities Fund which are treated, for Federal
income tax purposes, as arising in fiscal 1995. If not applied,
these carryover expires in fiscal 2002.

At April 30, 1995, the cost of each Portfolio's investments for
Federal income tax purposes was substantially the same as the
cost for financial reporting purposes (see Portfolio of Investments).

Note 3 - Management Fee and Other Transactions With Affiliates

(a) The Fund has an Investment Advisory Agreement with FCIMCO
pursuant to which FCIMCO has agreed to provide the day-to-day
management of each of the Portfolio's investments at an annual rate
of 0.20% of each Portfolio's average daily net assets.

The Fund has an Administration Agreement with FCIMCO pursuant to
which FCIMCO has agreed to assist in all aspects of each Portfolio's
operations at an annual rate of 0.15% of each Portfolio's
average daily net assets. In addition, FCIMCO has engaged
Concord to assist in providing certain administrative services to each
Portfolio pursuant to a Master Sub-Administration Agreement between
FCIMCO and Concord. FCIMCO has agreed to pay Concord a fee from
its own administration fee on a monthly basis.

B-72
<PAGE> 98

During the period January 17, 1995 through April 30, 1995,
FCIMCO agreed to limit each Portfolio's expenses to an annual
amount not to exceed 0.35% (excluding fees paid under the Service
Plan). In order that each Portfolio meet this limitation, FCIMCO
waived advisory fees of $93,522, $123,716, and $3,822 for the Cash
Management Fund, U.S. Government Securities Cash Management Fund
and Treasury Prime Cash Management Fund, respectively, FCIMCO
waived administration fees of $1,778 for the Treasury Prime
Cash Management Fund and FCIMCO reimbursed expenses of $13,294
for the Treasury Prime Cash Management Fund.

During the period June 1, 1994 through January 17, 1995 for the
U.S. Government Securities Fund and for the period July 1, 1994
through January 17, 1995 for the Cash Management Fund, the Fund
had a management agreement ("Agreement") with First Chicago pursuant
to which the Portfolios agreed to pay management fees which were
computed daily and paid monthly at the annual rate of .35% of the
average daily net assets of each Portfolio. During the same
period, First Chicago had engaged Dreyfus to assist in providing
certain administrative services for the Fund pursuant to a Master
Administration Agreement between First Chicago and Dreyfus.
Pursuant to its agreement with Dreyfus, First Chicago had agreed
to pay Dreyfus a monthly fee at the annual rate of .05% of the
average daily net assets of each Portfolio.

First Chicago had undertaken from June 1, 1994 through January
17, 1995 for the U.S. Government Securities Fund and for the
period July 1, 1994 through January 17, 1995 for the Cash Management
Fund to reduce the management fee paid by and reimburse such
excess expenses of the Portfolios, to the extent that the Portfolio's
aggregate expenses exceeded 0.35% of that Portfolios' average daily net
assets. The reduction in management fee, pursuant to the undertakings,
amounted to $151,249 and $112,956, respectively, for the periods
indicated above.

(b) The Fund has adopted a Service Plan (the "Plan") pursuant to
Rule 12b-1 under the Act. Under the terms of the Plan, each
Portfolio pays the Distributor an annual fee of 0.25% of the
average daily net assets of the outstanding Service Shares for
advertising, marketing and distributing each Portfolio's
Service Shares. For the period January 17, 1995 (initial
offering of Service Shares) through April 30, 1995, the Cash
Management Fund, U.S. Government Securities Cash Management Fund
and Treasury Prime Cash Management Fund each paid fees under the
Plan in the amounts of $45, $2,363 and $17, respectively. of these
amounts, the following was retained by the Distributor, and
affiliates of FCIMCO:

Amount paid to Amount paid to
the Distributor affiliates of FCIMCO
Cash Management Fund $9 $36
U.S. Government Securities
Cash Management Fund 9 2,354
Treasury Prime Cash
Management Fund 9 8

(b) Certain officers and trustees of the Fund are "affiliated
persons," as defined in the Act, of FCIMCO, First Chicago and
Concord. Each trustee who is not an "affiliated person" receives an
annual fee of $25,000 and an attendance fee of $1,000 per
meeting.

Note 4 - Transactions with Affiliates

During the period ended April 30, 1995, First Chicago
voluntarily contributed capital to the Cash Management Fund in
the amount of approximately $1.7 million. First Chicago received no
shares of

B-73
<PAGE> 99
beneficial interest or other consideration in exchange for this
contribution which increased net asset value. For tax purposes,
these capital contributions were applied against the realized losses
for the period ended April 30, 1995. Accordingly, such amounts have
been reclassified from additional paid-in capital against net realized
losses in the Statement of Assets and Liabilities.

B-74