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letter.htm
LETTER

August 12 2004 Correspondence

August 12, 2004

VIA EDGAR AND FACSIMILE

Securities and Exchange Commission

   Division of Corporation Finance

   450 Fifth Street, N.W.

   Washington, D.C. 20549

Attn: Mr. Patrick Gilmore

	Re:	Corio, Inc. - Item 4 Form 8-K filed August 4, 2004

Dear Mr. Gilmore:

We submit this letter in response to comments from the staff of the
Securities and Exchange Commission (the "Staff") received by letter
dated August 5, 2004 relating to Corio, Inc.'s (the "Company") Form
8-K filed August 4, 2004  (the "August Form 8-K").

In this letter, we have recited the comments from the Staff in italicized,
bold type and have followed each comment with the Company's response.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the August Form 8-K.

1.	We note that KPMG will resign pending completion of services
related to the review of the interim financial statements for the quarter ended
June 30, 2004.  Please note that, at such time as the review is completed and
the relationship has actually terminated, an additional Item 4 Form 8-K will be
required.  The Form 8-K should address all of the disclosures required by Item
304 of Regulation S-K.  An updated letter from the former accountant, filed as
Exhibit 16, should be provided along with the filing.  Supplementally, confirm
to us your intentions in this regard.

The Company acknowledges the Staff's comments and at such time as
KPMG's relationship with the Company has actually terminated, the Company will
file an additional Item 4 Form 8-K, which will address all of the disclosures
required by Item 304 of Regulation S-K, and will provide an updated letter from
KPMG, filed as Exhibit 16, along with the filing of the Form 8-K.

2.	We note in your 8-K that KPMG has advised management and the
audit committee of several reportable conditions.  Supplementally provide us
with all written correspondence between management, the audit committee, KPMG
and any others related to these reportable conditions.

The Company acknowledges the Staff's comments and will supplementally
provide under separate cover all written correspondence between management, the
audit committee, KPMG and any others related to these reportable conditions.

3.	Tell us what period the reportable conditions related to and why
they were not disclosed in Item 4 of your first quarter 10-Q and Item 9A of your
2003 10-K.  Additionally, tell us whether any adjusting entries were made as a
result of these reportable conditions and tells us in detail the steps
you have taken (or plan to take) and procedures you implemented (or plan to
implement) to correct these reportable conditions.

The matters identified by KPMG as reportable conditions relate to the
quarterly period ended June 30, 2004.  Accordingly, these reportable conditions
were not disclosed in Item 4 of our first quarter 10-Q or Item 9A of our 2003
10-K.

We have taken the following steps and implemented the following procedures to
correct these reportable conditions:

Monitoring debt covenant compliance

This finding relates to a new debt arrangement entered into in March 2004.
There was a misunderstanding of the covenants based on discussions with bank
personnel.  As a result of this finding, we have clarified the covenants and
reemphasized our monitoring of the compliance of these covenants.  Also as a
result of this finding, we reclassified $6.3 million of this debt from long term
to current.  We have obtained a waiver from the bank for the covenant violation
for the second quarter ended June 30, 2004 and are negotiating adjustments to
the covenants going forward.  This reclassification was based on our expectation
that we will violate the covenants for the third and fourth quarter of 2004 as
they are currently structured.

Absence of appropriate levels of accounting personnel

Due to demands for accounting personnel in the marketplace and other issues
beyond our control such as maternity leave, the Company experienced attrition of
key personnel in the accounting and finance departments subsequent to the first
quarter of 2004.  At the time of KPMG's findings, we had 5 temporary employees
in the finance and accounting departments.  Since that time, we have hired
3 of the 5 temporary employees as permanent employees.  In addition, we
have received an acceptance to our offer of employment for one of the remaining
temporary employees and an acceptance to our offer of employment for an
additional incremental accounting position.  We plan to extend an
additional offer of employment for an additional incremental accounting position
in the near future.

Absence of appropriate review and approval of all manual journal
entries

During the second quarter of 2004 it was noted that the Company's process of
documenting the review of all manual journal entries was not followed in all
cases.  We believe that these omissions were largely the result of our staff
turnover and we have reemphasized the requirement to properly document the
review of all manual journal entries.  As an additional control, we have added a
second review to confirm that the review of all manual entries has been properly
documented.

Evidence of failure to reconcile bank statements in a timely
manner

During the second quarter of 2004 it was noted that some of our bank
accounts were not reconciled in a timely manner.  The delays in the completion
of these reconciliations were due to the previously mentioned staffing issues
and their timely completion as part of our normal quarterly closing process was
interrupted by the abrupt call up of our accounting manager for 3 weeks of
United States military service.  These reconciliations were completed in time
for our earning release by other accounting department personnel.  Again, we
have reemphasized the company policy regarding the timely completion of all
reconciliations.

4.	When you engage a new accountant, please report the engagement in
a new Form 8-K and comply with the requirements of Regulation S-K Item
304(a)(2).  In making any disclosures about consultations with your new
accountants, please ensure you disclose any consultations up through the date of
engagement.

 The Company acknowledges the Staff's comments and at such time as we
engage a new accountant, we will report the engagement in a new Form 8-K and
comply with the requirements of Regulation S-K Item 304(a)(2), including
disclosing any consultations with our new accountants through the date of
engagement.

***

Please direct your questions or comments to me (650-232-3000).  In addition,
we would request that you provide a facsimile of any additional comments you may
have to me at (650-232-3200).  Thank you for your assistance.

Sincerely,

/s/ Brett White

   Brett White

   Chief Financial Officer

cc:	George Kadifa, Chief Executive Officer

     John Whittle, Vice President, General Counsel

      Corio, Inc.

Douglas H. Collom, Esq.

     Wilson Sonsini Goodrich & Rosati, P.C.