PRINCIPAL FUNDS’ CCO ANNUAL CERTIFICATION
Pursuant to Item G.1.a.v of Form N-CEN
For the year ended December 31, 2023
I, as the Chief Compliance Officer for Principal Funds, Inc. and Principal Variable Contracts Funds, Inc. (collectively, the “Funds”) certify that the Funds and Principal Global Investors, LLC have established procedures reasonably designed to achieve compliance with the terms and conditions of their application to participate in a joint lending and borrowing facility, which application was granted by order of the Securities and Exchange Commission dated October 25, 2011 (the “Application”). This includes procedures designed to achieve the following objectives:
Capitalized terms that are used but not defined herein have the meanings given them in the Application.
In planning and performing our audits of the financial statements of Principal Variable Contracts Funds, Inc., (the “Fund”) (comprising the funds listed individually in Exhibit A attached hereto) as of and for the year ended December 31, 2023, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), we considered the Fund’s internal control over financial reporting, including controls over safeguarding securities, as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements and to comply with the requirements of Form N-CEN, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
The management of the Fund is responsible for establishing and maintaining effective internal control over financial reporting. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of a company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Fund’s annual or interim financial statements will not be prevented or detected on a timely basis. Our consideration of the Fund’s internal control over financial reporting was for the limited purpose described in the first paragraph and would not necessarily disclose all deficiencies in internal control that might be material weaknesses under standards established by the PCAOB. However, we noted no deficiencies in the Fund’s internal control over financial reporting and its operation, including controls over safeguarding securities, that we consider to be a material weakness as defined above as of December 31, 2023. This report is intended solely for the information and use of management and the Board of Directors of the Principal Variable Contracts Funds, Inc. 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
Minneapolis, Minnesota
February 21, 2024
Exhibit A
Blue Chip Account Bond Market Index Account Core Plus Bond Account Diversified Balanced Account Diversified Balanced Managed Volatility Account Diversified Balanced Volatility Control Account Diversified Growth Account Diversified Growth Managed Volatility Account Diversified Growth Volatility Control Account Diversified Income Account Diversified International Account
Equity Income Account Global Emerging Markets Account Government & High Quality Bond Account LargeCap Growth Account I LargeCap S&P 500 Index Account LargeCap S&P 500 Managed Volatility Index Account MidCap Account Principal Capital Appreciation Account Principal LifeTime 2020 Account Principal LifeTime 2030 Account Principal LifeTime 2040 Account Principal LifeTime 2050 Account Principal LifeTime 2060 Account Principal LifeTime Strategic Income Account
Real Estate Securities Account SAM Balanced Portfolio SAM Conservative Balanced Portfolio SAM Conservative Growth Portfolio SAM Flexible Income Portfolio SAM Strategic Growth Portfolio Short-Term Income Account SmallCap Account U.S. LargeCap Buffer April Account U.S. LargeCap Buffer January Account U.S. LargeCap Buffer July Account U.S. LargeCap Buffer October Account