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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 10
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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SIGNATURE CHERYL KING
TITLE SR FINANCIAL ANALYST
<TABLE> <S> <C>
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<CIK> 0000932510
<NAME> ICAP FUNDS, INC.
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<NAME> ICAP DISCRETIONARY EQUITY PORTFOLIO
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</TABLE>
Exhibit to Accompany
Item 77J (b)
Form N-SAR
ICAP Funds, Inc.
( the "Fund")
According to the provisions of Statement of Position 93 - 2 (SOP 93 - 2)
"Determination, Disclosure and Financial Statement Presentation of
Income, Capital Gain and Return of Capital Distributions by Investment
Companies," the Fund is required to report the accumulated net
investment income (loss) and accumulated net capital gain (loss) accounts
to approximate amounts available for future distributions on a tax basis
(or to offset future realized capital gains). Accordingly, at December 31,
1997, reclassifications were recorded from undistributed net investment
income to reduce paid-in-capital by $4,063 for both the Discretionary
Equity and Equity Portfolios.
This reclassification has no impact on the net asset value of the Fund and
is designed to present the Fund's capital account on a tax basis.
sl
\\SUNSTONE_1\MAC\SHARE\DATA\ICAP\NSAR\ITEM77JB-98.doc
02/18/98
Report of Independent Accountants
To the Board of Directors of
ICAP Funds, Inc.
In planning and performing our audits of the financial statements and
financial highlights of the ICAP Funds, Inc. (the "Funds") (comprising,
respectively, the Discretionary Equity and the Equity Portfolios) for the
year ended December 31, 1997, we considered its internal controls,
including control over safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on the
financial statements and financial highlights and to comply with the
requirements of Form N-SAR, not to provide assurance on internal
controls.
The management of the Funds is responsible for establishing and
maintaining internal controls. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected
benefits and related costs of controls. Generally, controls that are
relevant to an audit pertain to the entity's objective of preparing financial
statements and financial highlights for external purposes that are fairly
presented in conformity with generally accepted accounting principles.
Those controls include the safeguarding of assets against unauthorized
acquisition, use or disposition.
Because of inherent limitations in internal controls, misstatements due to
errors or fraud may occur and may not be detected. Also, projection of
any evaluation of internal controls to future periods is subject to the risk
that it may become inadequate because of changes in conditions or that
the effectiveness of the design and operation may deteriorate.
Our consideration of internal controls would not necessarily disclose all
matters in internal control that might be material weaknesses under
standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design or
operation of any specific internal control component does not reduce to a
relatively low level the risk that misstatements due to errors or fraud in
amounts that would be material in relation to the financial statements and
financial highlights being audited may occur and not be detected within a
timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving internal
control, including controls over safeguarding securities, that we consider
to be material weaknesses as defined above as of December 31, 1997.
This report is intended solely for the information and use of management
of management and the Securities and Exchange Commission.
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
January 23, 1998
