Report of Independent Registered Public Accounting Firm

The Shareholders and Board of Directors
Principal Funds, Inc.

In planning and performing our audit of the financial statements of
Principal Funds, Inc. as of and for the year ended October 31, 2009, in
accordance with the standards of the Public Company Accounting
Oversight Board (United States), we considered its internal controls
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-SAR, but not for the purpose of
expressing an opinion on the effectiveness of Principal Funds, Inc.'s
internal control over financial reporting. Accordingly, we express no
such opinion.

The management of Principal Funds, Inc. 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 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 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 company's annual or
interim financial statements will not be prevented or detected on a
timely basis.

Our consideration of Principal Funds, Inc.'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 Public Company Accounting Oversight Board (United
States). However, we noted no deficiencies in Principal Funds, Inc.'s
internal control over financial reporting and its operation, including
controls for safeguarding securities that we consider to be a material
weakness as defined above as of October 31, 2009.

This report is intended solely for the information and use of
management and the Board of Directors of Principal 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

Chicago, Illinois
December 18, 2009