EX-99.77B ACCT LTTR

Report of Independent Auditors
The Board of Directors and Shareholders
American Strategic Income Portfolio Inc. III

In planning and performing our audit of the financial
statements of American Strategic Income Portfolio
Inc. III (the Fund) for the year ended May 31, 2002,
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 judgments
by management are required to assess the expected
benefits and related costs of controls. Generally,
controls 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 accounting principles generally accepted in the
United States. Those controls include the safeguarding of
assets against unauthorized acquisition, use, or disposition.

Because of inherent limitations in internal control, error
or fraud 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
one or more of the internal control components does not reduce
to a relatively low level the risk that misstatements caused by
error 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 and its operation, including
controls for safeguarding securities, that we consider to be
material weaknesses as defined above as of May 31, 2002.

This report is intended solely for the information and use of
management and the Board of Directors of the Fund 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
July 2, 2002

EX-99.77C VOTES

Shareholder Update

Annual Meeting Results
An annual meeting of the Fund's shareholders was held on
August 27, 2001.  Each matter voted upon at that meeting,
as well as the number of votes cast for, against or withheld,
the number of abstentions, and the number of broker non-votes
with respect to such matters, are set forth below.


(1)  The Fund's shareholders elected the following ten directors:

				Shares	Shares Withholding
				Voted For	Authority to Vote
Robert J. Dayton		18,946,179	1,304,475
Andrew S. Duff			20,035,916	212,738
Roger A. Gibson			20,045,415	204,239
Andrew M. Hunter III		20,044,523	205,131
Leonard W. Kedrowski		20,042,880	206,774
John M. Murphy, Jr.		20,041,389	208,265
Richard K. Riederer		20,043,388	206,266
Joseph D. Strauss		20,040,012	209,642
Virginia L. Stringer		20,030,791	218,863
James M. Wade			20,045,367	204,287


(2)  The Fund's shareholders ratified the selection by the
Fund's board of directors of Ernst & Young as the independent
public accountants for the Fund for the fiscal year ending
May 31, 2002.  The following votes were cast regarding this matter:

   Shares	Shares		  		  	Broker
Voted For	Voted Against 	Abstentions		Non Votes
20,009,215	84,000		   156,345                  4