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SIGNATURE BERNADETTE N. FINN
TITLE SECRETARY
Report of Independent Accountants
To the Board of Directors and Shareholders of
Virginia Daily Municipal Income Fund, Inc.
In planning and performing our audit of the financial statements of Virginia
Daily Municipal Income Fund, Inc. (the "Fund") for the year ended September 30,
1999, we considered its internal control, including control activities for
safeguarding securities, in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and to comply with
the requirements of Form N-SAR, not to provide assurance on internal control.
The management of the Fund is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit pertain to the
entity's objective of preparing financial statements for external purposes that
are fairly presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control to
future periods is subject to the risk that controls may become inadequate
because of changes in conditions or that the effectiveness of their design and
operation may deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or more
of the internal control components does not reduce to a relatively low level the
risk that misstatements caused by error or fraud in amounts that would be
material in relation to the financial statements being audited may occur and not
be detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters involving
internal control and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above as of
September 30, 1999.
This report is intended solely for the information and use of the Board of
Directors, management and the Securities and Exchange Commission and is not
intended to be and should not be used by anyone other than these specified
parties.
PricewaterhouseCoopers LLP
November 1, 1999
VIRGINIA DAILY MUNICIPAL INCOME FUND, INC.
CHANGE IN INDEPENDENT ACCOUNTANTS
On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as independent
auditors of the Fund pursuant to an agreement by PricewaterhouseCoopers LLP
(PwC) to acquire McGladrey's investment company practice. The McGladrey partners
and professionals serving the Fund at the time of acquisition have joined PwC.
The report of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or a disclaimer of opinion, and
were not qualified or modified as to certainty, audit scope or accounting
principles.
In connection with its audits for the two most recent fiscal years and through
August 13, 1999, there were no disagreements with McGladrey on any matter of
accounting principle or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
McGladrey would have caused it to make reference to the subject matter of
disagreement in connection with its report.
Effective August 13, 1999, the Fund, with the approval of its Board of Directors
and its Audit Committee, engaged PwC as its independent auditors.
<PAGE>
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street
Washington D.C. 20549
We were previously the independent accountants for the Virginia Daily Municipal
Income Fund, Inc. We have read their notification of change in independent
accountants made in Item 77K of Form N-SAR. We agree with the statements in the
filing.
McGladrey & Pullen, LLP
New York, New York
November 24, 1999
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> The schedule contains summary financial information
extracted from the financial statements and supporting
schedules as of the end of the most current period and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000942811
<NAME> Virginia Daily Municipal Income Fund, Inc.
<SERIES>
<NUMBER> 1
<NAME> Class A
<S> <C>
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<PERIOD-START> OCT-01-1998
<PERIOD-END> SEP-30-1999
<PERIOD-TYPE> 12-MOS
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<INVESTMENTS-AT-VALUE> 3146017
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> The schedule contains summary financial information
extracted from the financial statements and supporting
schedules as of the end of the most current period and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000942811
<NAME> Virginia Daily Municipal Income Fund, Inc.
<SERIES>
<NUMBER> 2
<NAME> Class B
<S> <C>
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</TABLE>
