THE SCOTT LAW FIRM, P.A.
940 Northeast 79th Street, Suite A
Miami, Florida 33138
(305) 754-3603
facsimile (305) 754-2668
wscott@wscottlaw.com
July 3, 2007
Ms. Linda Van Doorn
Senior Assistant Chief Accountant
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Providence Select Fund, Limited Partnership (the "Fund")
Form 10-K for the year ended 12/31/2006 Filed on 4/2/2007
File No. 333-108629
Dear Ms. Van Doorn,
We have reproduced below the comments provided in your letter to the
Issuer of June 25, 2007, and have supplied responses immediately following
each of the comments.
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2006
Item 9A. Controls and Procedures, page 7
1. We have read your response to comment one. Tell us how the changes to
your disclosure controls and procedures impacted your evaluation of the
effectiveness of their design and operation. D/N/T: Their response alludes to
changes in the disclosure controls and procedures, but does not state how
these changes impacted their evaluation into the effectiveness of the design
and operation of their disclosure controls and procedures.
Response: The Fund has finalized its revision to Section 9A in the 10-K
amendment filed concurrently with this letter, as follows:
In the Fund's previously-filed Annual Report on Form 10-K for the year ended
December 31, 2006 (the "Annual Report"), the General Partner of the Fund,
under the actions of its sole principal, Michael Pacult, evaluated the
effectiveness of the design and operation of its disclosure controls and
procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e)
or 15d-15(e)) with respect to the Fund as of December 31, 2006 and found them
adequate. In May, 2007, management was informed by the SEC that its
financials did not conform to SEC requirements because (1) the financials
contained only two, and not three, years of
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financial information and inception to date for the statements of operations,
changes in net assets, and cash flows, and (2) the audit opinion did not cover
all financial periods stated. Because of these omissions, management has re-
evaluated its prior conclusion regarding the effectiveness of the design and
operation of its disclosure controls and procedures as of December 31, 2006
with respect to the Fund. Based upon Mr. Pacult's re-evaluation, conducted
under Exchange Act Rules 13a-15 or 15d-15(e), he concluded that the omissions
were caused by a personnel problem, were the result of obvious human error and
lack of attention to detail, and that the Fund's disclosure controls and
procedures were accordingly not effective to prevent or catch this type of
error as of December 31, 2006. To remediate the situation, Mr. Pacult has
severely reprimanded those persons who prepared and reviewed the financial
statements included in the Annual Report. Mr. Pacult accepts total
responsibility for the financial statements of the Fund and filings made with
the SEC, including the Annual Report and this Amendment.
There have been no changes in the General Partner's internal controls over the
financial reporting applicable to the Fund identified in connection with the
evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15
that occurred during the fourth quarter of fiscal year 2006 and through the
date of this Amendment that have materially affected, or are reasonably likely
to materially affect, internal control over financial reporting applicable to
the Fund.
2. We have read your responses to comments two and three and will monitor
your amendment for compliance.
Response: We are filing the 10-K amendment concurrently with this letter.
Note 2 - Significant Accounting Policies
Offering Expenses and Organizational Costs. page F-7
3. We have read your response to comment four. We have read your response
to comment five. The capitalization of these expenses is inconsistent with
both SOP 98-5 and SAB Topic 5A. Revise your financial statements accordingly
to expense organizational costs as incurred and to expense offering costs in
the period following effectiveness.
Response: The Fund cleared the Commission's review of its registration
statement and prospectus with the provision that offering expenses would be
deferred until the thirteenth month following the commencement of business and
would be paid without interest. This was clearly stated in both text and
tabular format in the main body of the prospectus, as well as the financial
statements contained therein.
By its letter to the Fund dated January 19, 2005, the Commission issued the
following comment regarding organizational and offering expenses:
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7. The disclosure throughout the filing relating to the "Charges to the
Fund" suggests that the item "Reimbursable syndication costs" presented on the
balance sheet includes organizational costs. Revise to clarify as appropriate.
Also, disclose your accounting policy for organizational costs. Refer to SOP
98-5.
The Fund responded with "The organization costs for the fund will be expensed
as incurred by the corporate general partner, White Oak, and are expected to
be immaterial." By its letter to the fund dated February 11, 2005, the
Commission issued this follow-up comment:
4. Your response to comment 7 does not address directly or completely our
request for revised disclosure relating to "Reimbursable syndication costs."
If this item includes organizational costs, you should revise the financial
statements of the Fund to expense them, and revise this note and the
disclosure elsewhere in the filing accordingly. Also, disclose the Fund's
accounting policy for organizational costs. Refer to SOP 98-5."
The Fund responded with "We have revised the financials to comply." No
subsequent comment letter issued by the Commission involved the Fund's
organizational or offering expenses. Accordingly, the Fund believed that the
Commission's application of SOP 98-5 to the Fund's financial statements was
complete and that, upon effectiveness, the Commission's application of all
financial regulations to the Fund's financial statements would not change,
specifically, the reimbursement of offering expenses beginning in the
thirteenth month.
SAB Topic 5A states, "Specific incremental costs directly attributable to a
proposed or actual offering of securities may properly be deferred and charged
against the gross proceeds of the offering." This does not prohibit the Fund
from deferring offering expenses to a time after effectiveness, especially
when the deferral is in the interest of the investor.
To now require the Fund to expense offering costs in the period following
effectiveness will materially change the terms upon which the limited partners
were sold units in the Fund. It will also immediately reduce the amount of
capital available for investment to reduce the possible recapture of the
expenses through trading income, a possibility the Unit purchasers were not
given the opportunity to factor into their investment decision. It would be
inconsistent with the announced purpose of Commission oversight to force the
Fund to change its payment of expenses to the detriment of the investors. The
Fund respectfully requests that the Commission allow it to perform consistent
with the terms of the offering made to its Unit holders.
We offer the following excerpts from filings of other commodity pools that we
believe support our request for relief by the Fund from the adverse effect of
the
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comment that offering expenses be expensed in the period following
effectiveness. Emphasis is ours.
ROGERS INTERNATIONAL RAW MATERIALS FUND LP
2001 10-K
http://sec.gov/Archives/edgar/data/1118384/000095013702001527/c68285e10-k.txt
Organizational Costs for the Fund equaled $364,698. These costs are being
amortized over the three-month period beginning November 2001. These costs
include legal fees, accounting fees and printing costs.
SALOMON SMITH BARNEY DIVERSIFIED 2000 FUTURES FUND L.P.
2000 10-K
http://sec.gov/Archives/edgar/data/1095007/000109500701000008/0001095007-01-
000008-0001.txt
Offering and organization expenses of approximately $750,000 relating to the
issuance and marketing of the Partnership's Units offered were initially
paid by SSB. These costs are being reimbursed to SSB by the Partnership in
24 equal monthly installments (together with interest at the prime rate
quoted by J.P. Morgan Chase & Co.).
For the period ended December 31, 2000, $193,011 of these costs have been
reimbursed to SSB, by the Partnership. In addition, the Partnership has
recorded interest expense of $37,267, for the period ended December 31, 2000
which is included in other expenses.
The remaining liability for these costs due to SSB of $556,989 (exclusive of
interest charges) will not reduce redemption/subscription value per Unit for
any purpose (other than financial reporting), including calculation of
advisory and brokerage fees.
UBS MANAGED FUTURES LLC (ASPECT SERIES)
March, 2007 10-Q
http://sec.gov/Archives/edgar/data/1373179/000090514807003764/efc7-
1416_form10q.txt
The Sponsor paid all expenses incurred in connection with the organizational
and initial offering of the Units at the Series level. As described in the
Disclosure Document, the Series is reimbursing the Sponsor for these costs and
the unreimbursed costs as of March 31, 2007 are recorded in accrued
organizational and the initial offering costs on the Condensed Statements of
Financial Condition. For financial reporting purposes in conformity with U.S.
generally accepted accounting principles, the Series expensed the total
organizational costs of $208,820 when incurred and deducted the initial
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offering costs of $119,732 from members' capital as of March 16, 2007 (the
date of commencement of operations of the Series). For all other purposes,
including determining the net asset value per Unit for subscription and
redemption purposes, the Series amortizes organizational and initial offering
costs over a 60 month period (the "net asset value for all other purposes" or
the "net asset value per Unit for all other purposes").
THE PRICE FUND I, L.P.
2003 10-K
http://sec.gov/Archives/edgar/data/1162725/000119312504053759/d10k.htm
In addition, the Partnership will pay Price Futures Group 0.5 percent of the
purchase price of each limited partnership unit sold for syndication costs
incurred by Price Futures Group, subject to increase to 1 percent at the
discretion of the General Partner. These syndication costs, which are related
to the issuance of limited partnership units, will be charged to partners'
capital upon the issuance of such units. As of December 31, 2003, Price
Futures Group had incurred syndication costs, comprised of legal and
accounting fees and marketing expenses, of approximately $445,669 (2002 -
$306,000).
CAMPBELL STRATEGIC ALLOCATION FUND, L.P.
2004 10-K
http://sec.gov/Archives/edgar/data/910467/000095013305001327/w07151e10vk.htm
Campbell & Company, Inc. (Campbell & Company) has incurred all costs in
connection with the initial and continuous offering of units of the Fund
(offering costs). The Fund's liability for offering costs is limited to the
maximum of total offering costs incurred by Campbell & Company or 2.5% of the
aggregate subscriptions accepted during the initial and continuous offerings;
this maximum is further limited by 30 month pay-out schedules. The Fund is
only liable for payment of offering costs on a monthly basis as calculated
based on the limitations stated above. At December 31, 2004, the Fund reflects
a liability in the statement of financial condition for offering costs payable
to Campbell & Company of $2,230,619. The amount of monthly reimbursement due
to Campbell & Company is charged directly to partners' capital.
POWERSHARES DB COMMODITY INDEX TRACKING FUND
2006 10-K
http://sec.gov/Archives/edgar/data/1328239/000119312507066062/d10k.htm
In addition to the upfront selling commissions, expenses incurred in
connection with organizing the Fund, the initial offering of the Limited
Shares and the continuous offering of Limited Shares after the commencement of
the Master Fund's trading operations were paid by the Managing Owner. These
were subject to reimbursement by the Master Fund, without interest, in
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36 monthly payments during each of the first 36 months after the commencement
of the Master Fund's trading operations or following the month in which such
expense was paid after operations had commenced.
We are grateful for the opportunity to present this response and are
available to amplify or clarify any information submitted.
Very truly yours,
/s/ William S. Scott
William Sumner Scott
For the Firm
WSS/lf
cc: White Oak Financial Services, Inc.
General Partner - CPO
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