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Price Waterhouse                                       [LOGO]


To the Shareholders and
Board of Trustees of
The AAL Mutual Funds

In planning and  performing  our audit of the  financial  statements  of The AAL
Capital  Growth Fund,  The AAL Mid Cap Stock Fund, The AAL Small Cap Stock Fund,
The AAL  International  Fund, The AAL Utilities Fund, The AAL Bond Fund, The AAL
Municipal  Bond Fund,  The AAL High Yield Bond Fund,  The AAL Money Market Fund,
The AAL U.S.  Government  Zero Coupon Target Fund,  Series 2001 and The AAL U.S.
Government  Zero Coupon  Target Fund,  Series 2006,  the  portfolios  of The AAL
Mutual Funds (the "Fund") for the period ended April 30, 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 Fund is  responsible  for  establishing  and  maintaining
internal control. In fulfilling this responsibility, estimates and judgements 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 entity's 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


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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 April 30, 1997.

This report is intended solely for the information and use of management and the
Board of Trustees of the Fund and the Securities and Exchange Commission.


/s/ Price Waterhouse LLP
Price Waterhouse
Milwaukee, WI
May 22, 1997