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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
BlackRock MuniYield Quality Fund, Inc.:
In planning and performing our audit of the financial statements of BlackRock MuniYield Quality Fund, Inc. (the “Fund”), as of and for the year ended April 30, 2011, in accordance with the standards of the Public Company Accounting Oversight Board (United States), 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-SAR, 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 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 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 Public Company Accounting Oversight Board (United States). However, we noted no deficiencies in the Fund'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 April 30, 2011.
This report is intended solely for the information and use of management and the Board of Directors of BlackRock MuniYield Quality Fund, 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.
Deloitte & Touche LLP
Princeton, New Jersey
June 24, 2011
FORM 10f-3
THE BLACKROCK FUNDS
Record of Securities Purchased
Under the Trust’s Rule 10f-3 Procedures
1.
Name of Purchasing Portfolio: BlackRock Municipal Bond Fund (BR-INSRD), BlackRock Municipal Income Quality Trust (BYM), BlackRock MuniEnhanced Fund, Inc. (MEN), BlackRock MuniYield Quality Fund II, Inc. (MQT), BlackRock MuniYield Quality Fund, Inc. (MQY), BlackRock MuniYield Quality Fund III, Inc. (MYI)
2.
Issuer: Pennsylvania Turnpike Commission
3.
Date of Purchase: 04/15/11
4.
Underwriter from whom purchased: Morgan Stanley & Co., Incorporated
5.
Name of Affiliated Underwriter (as defined in the Trust’s procedures) managing or participating in syndicate: PNC Capital Markets LLC
a.
List Members of Underwriting Syndicate:
Morgan Stanley & Co., Incorporated, Jefferies & Company, Barclays Capital, Wells Fargo Securities, PNC Capital Markets LLC, Edward Jones, Rice Financial Products Company
6.
Aggregate principal amount purchased (out of total offering) (if an equity offering, list aggregate number of shares purchased (out of total number of shares offered)): (BR-INSRD) $950,000 out of $238,275,000; (BYM) $625,000 out of $238,275,000; (MEN) $575,000 out of $238,275,000; (MQT) $500,000 out of $238,275,000, (MQY) $775,000 out of $238,275,000, (MYI) $1,575,000 out of $238,275,000
7.
Aggregate principal amount purchased by funds advised by BlackRock and any purchases by other accounts with respect to which BlackRock has investment discretion (out of the total offering) (if an equity offering, list aggregate number of shares purchased (out of total number of shares offered)): $8,500,000 out of $238,275,000
8.
Purchase price (net of fees and expenses): $104.212
9.
Date offering commenced (if different from Date of Purchase):
10.
Offering price at end of first day on which any sales were made:
11.
Have the following conditions been satisfied:
Yes
No
a.
The securities are part of an issue registered under
the Securities Act of 1933, as amended, which
is being offered to the public, or are Eligible Municipal
Securities, or are securities sold in an
Eligible Foreign
Offering or are securities sold in an Eligible Rule 144A
Offering or part of an issue of government
securities.
_X____
b.
The securities were purchased prior to the
end of the first day on which any sales
were made, at a price that was not more
than the price paid by each other
purchaser of securities in that offering
or in any concurrent offering of the
securities (except, in the case of an
Eligible Foreign Offering, for any rights
to purchase required by laws to be granted
to existing security holders of the
Issuer) or, if a rights offering, the
securities were purchased on or before the
fourth day preceding the day on which the
rights offering terminated.
_X___
c.
The underwriting was a firm commitment
underwriting.
_X___
d.
The commission, spread or profit was
reasonable and fair in relation to that
being received by others for underwriting
similar securities during the same period.
_X___
e.
In respect of any securities other than
Eligible Municipal Securities, the issuer
of such securities has been in continuous
operation for not less than three years
(including the operations of predecessors).
_X____
a.
Has the affiliated underwriter confirmed
that it will not receive any direct or indirect
benefit as a result of BlackRock's participation
in the offering?
_X____
Completed by: __Steve DeLaura_____ Date: ___05/13/11
Approved by: ___Beth Moore__________ Date: __05/25/11_____
#
FORM 10f-3
THE BLACKROCK FUNDS
Record of Securities Purchased
Under the Trust’s Rule 10f-3 Procedures
1.
Name of Purchasing Portfolio: BlackRock Insured Municipal Income Investment Trust (BAF), BlackRock Municipal Bond Trust (BBK), BlackRock Investment Quality Municipal Trust (BKN), BlackRock Municipal Insured Fund (BR-INSRD), BlackRock Ohio Municipal Bond Portfolio (BR-OH), BlackRock Insured Municipal Income Trust (BYM), BlackRock MuniEnhanced Fund, Inc. (MEN), BlackRock MuniHoldings Insured Investment Fund (MFL), MuniYield Insured Investment Fund (MFT), BlackRock MuniYield Quality Fund II, Inc. (MQT), BlackRock MuniYield Quality Fund, Inc. (MQY), BlackRock MuniYield Insured Fund, Inc. (MYI)
2.
Issuer: State of Ohio (Hospital Facilities Revenue Bonds, Summa Health
System 2010 Project)
3.
Date of Purchase: 04/29/10
4.
Underwriter from whom purchased: J.P. Morgan Securities Inc.
5.
Name of Affiliated Underwriter (as defined in the Trust’s procedures) managing or participating in syndicate: PNC Capital Markets LLC
a.
List Members of Underwriting Syndicate: J.P. Morgan Securities Inc., PNC Capital Markets LLC
6.
Aggregate principal amount purchased (out of total offering) (if an equity offering, list aggregate number of shares purchased (out of total number of shares offered: (BAF) $1,625,000 out of $183,645,000; (BBK) $1,600,000 out of $183,645,000; (BKN) $2,400,000 out of $183,645,000; (BR-INSRD) $2,175,000 out of $183,645,000; (BR-OH) $1,000,000 out of $183,645,000; (BYM) $1,375,000 out of $183,645,000; (MEN) $1,250,000 out of $183,645,000; (MFL) $7,725,000 out of $183,645,000; (MFT) $1,650,000 out of $183,645,000; (MQT) $1,100,000 out of $183,645,000; (MQY) $1,700,000 out of $183,645,000; (MYI) $3,400,000 out of $183,645,000
7.
Aggregate principal amount purchased by funds advised by BlackRock and any purchases by other accounts with respect to which BlackRock has investment discretion (out of the total offering) (if an equity offering, list aggregate number of shares purchased (out of total number of shares offered)): $27,000,000 out of $183,645,000
8.
Purchase price (net of fees and expenses): $97.476
9.
Date offering commenced (if different from Date of Purchase):
10.
Offering price at end of first day on which any sales were made:
11.
Have the following conditions been satisfied:
Yes
No
a.
The securities are part of an issue registered under
the Securities Act of 1933, as amended, which
is being offered to the public, or are Eligible Municipal
Securities, or are securities sold in an
Eligible Foreign
Offering or are securities sold in an Eligible Rule 144A
Offering or part of an issue of government
securities.
_X__
___
b.
The securities were purchased prior to the
end of the first day on which any sales
were made, at a price that was not more
than the price paid by each other
purchaser of securities in that offering
or in any concurrent offering of the
securities (except, in the case of an
Eligible Foreign Offering, for any rights
to purchase required by laws to be granted
to existing security holders of the
Issuer) or, if a rights offering, the
securities were purchased on or before the
fourth day preceding the day on which the
rights offering terminated.
_X__
___
c.
The underwriting was a firm commitment
underwriting.
_X_
___
d.
The commission, spread or profit was
reasonable and fair in relation to that
being received by others for underwriting
similar securities during the same period.
_X_
___
e.
In respect of any securities other than
Eligible Municipal Securities, the issuer
of such securities has been in continuous
operation for not less than three years
(including the operations of predecessors).
_X__
___
a.
Has the affiliated underwriter confirmed
that it will not receive any direct or indirect
benefit as a result of BlackRock's participation
in the offering?
_X__
___
Approved by: ___Janine Bianchino____ Date: ____05/20/10_________
#
BlackRock MuniYield Quality Fund, Inc. (the “Registrant”)
77Q1(a):
Copies of material amendments to Registrant’s charter or by-laws
Attached please find as an exhibit under Sub-Item 77Q1(a) of Form N-SAR a copy of the Registrant's Articles Supplementary filed with the with the State Department of Assessments and Taxation of Maryland on September 17, 2010.
BLACKROCK MUNIYIELD QUALITY FUND, INC.
Articles Supplementary
BlackRock MuniYield Quality Fund, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of the State of Maryland, that:
FIRST: Under a power contained in Title 3, Subtitle 8 of the Maryland General Corporation Law (the “MGCL”), the Corporation, by amendment to the bylaws of the Corporation (the “Bylaw Amendment”), elected to become subject to Section 3-804(c) of the MGCL.
SECOND: The Bylaw Amendment provides that the Corporation elects to be subject to the provisions of Section 3-804(c) of the MGCL, subject to applicable requirements of the Investment Company Act of 1940 and the rules and regulations promulgated thereunder and the right of the stockholders of a class or series of stock of the Corporation to elect additional directors to the board of directors of the Corporation in accordance with the charter of the Corporation, the repeal of which may be effected only by the means authorized by Section 3-802(b)(3) of the MGCL.
THIRD: The Bylaw Amendment and these Articles Supplementary have been approved by the board of directors of the Corporation in the manner and by the vote required by the MGCL.
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IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be signed in its name and on its behalf as of the 17 th day of September, 2010, by its President who acknowledges that these Articles Supplementary are the act of the Corporation and, to the best of his knowledge, information and belief and under penalties for perjury, all matters and facts contained in these Articles Supplementary are true in all material respects.
ATTEST:
BLACKROCK MUNIYIELD QUALITY
FUND, INC.
/s/ Howard Surloff
By: /s/ Anne Ackerley
(SEAL)
Name:
Howard Surloff
Name: Anne Ackerley
Title: Secretary
Title:
President
= 2"920494-New York Server 1A - MSW" ""