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SIGNATURE SCOTT FITZHENRY
TITLE A.V.P. FUND ADMIN.
February 12, 1998
To the Board of Trustees of New England Funds Trust III
In planning and performing our audit of the financial statements
of New England Equity Income Fund (constituting New England Funds
Trust III, hereafter referred to as the Trust) for the year ended
December 31, 1997, 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 Trust 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 control activities.
Generally, control activities that are relevant to an audit
pertain to the entitys objective of preparing financial statements
for external purposes that are fairly presented in conformity with
generally accepted accounting principles. Those control activities
include the safeguarding of assets against unauthorized acquisition,
use or disposition.
Because of inherent limitations in internal control, errors or
irregularities may occur and not be detected. Also, projection of
any evaluation of internal control 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 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 any specific internal control components does
not reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation to the
financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters
involving internal control, including control activities for
safeguarding securities, that we consider to be material weaknesses
as defined above as of December 31, 1997.
This report is intended solely for the information and use of
management and the Board of Trustees of New England Funds Trust III
and the Securities and Exchange Commission.
PRICE WATERHOUSE LLP
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