ITEM 77.B) ACCOUNTANT'S REPORT ON INTERNAL CONTROL
To the Shareholders and
Board of Trustees of the
American AAdvantage Mileage Funds
In planning and performing our audits of the financial statements of the
American AAdvantage Mileage Funds (comprised of the Balanced, Large Cap
Value, Small Cap Value, International Equity, Intermediate Bond and
Short-Term Bond) (collectively, the "Funds") for the period ended
October 31, 2000, we considered their internal control, including
control activities for safeguarding securities, 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,
and not to provide assurance on internal control.
The management of the Funds 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 internal control. Generally,
internal 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 accounting principles generally
accepted in the United States. Those internal controls include the
safeguarding of assets against unauthorized acquisition, use, or
disposition.
Because of inherent limitations in any internal control, misstatements
due to errors or fraud may occur and not be detected. Also, projections
of any evaluation of internal control to future periods are subject to
the risk that internal control may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or
procedures 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 specific internal control components
does not reduce to a relatively low level the risk that errors 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,
including control activities for safeguarding securities, and its
operation that we consider to be material weaknesses as defined above as
of October 31, 2000.
This report is intended solely for the information and use of the Board
of Trustees and management of the Funds and the Securities and Exchange
Commission and is not intended to be and should not be used by anyone
other than these specified parties.
/s/ Ernst & Young LLP
Dallas, Texas
December 15, 2000
