FRANKLIN UNIVERSAL TRUST — Audit Report / Information 2007

May 16, 2007

U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-17F-2 CERTIFICATE OF ACCOUNTING OF SECURITIES AND SIMILAR INVESTMENTS IN THE CUSTODY OF MANAGEMENT INVESTMENT COMPANIES PURSUANT TO RULE N-17F-2 1. Investment Company Act File Number: Date Examination completed: 811-05569 July 5, 2006 2. State Identification Number: AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY PUERTO RICO 3. Exact name of investment company as specified in registration statement: FRANKLIN UNIVERSAL TRUST 4. Address of principal executive office: (number, street, city, state, zip code) One Franklin Parkway San Mateo, CA 94403 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees of Franklin Global Trust Franklin Strategic Series Franklin Templeton Fund Allocator Series Franklin Universal Trust Franklin Strategic Mortgage Portfolio Franklin Gold and Precious Metals Fund Franklin Floating Rate Trust Franklin Capital Growth Fund Institutional Fiduciary Trust Franklin High Income Trust Franklin Real Estate Securities Trust Franklin Investors Securities Trust Franklin Value Investors Trust Franklin Templeton Money Fund Trust Franklin Multi-Income Trust Franklin Templeton Limited Duration Income Trust Templeton Russia and East European Fund, Inc. Templeton Global Income Fund Templeton Emerging Markets Fund Templeton Emerging Markets Income Fund Templeton Capital Accumulator Fund and the Board of Directors of Franklin Money Fund Franklin Federal Money Fund Franklin Custodian Funds, Inc. Templeton Dragon Fund, Inc. Templeton Institutional Funds, Inc. We have examined management's assertion, included in the accompanying Management Statement Regarding Compliance with Certain Provisions of the Investment Company Act of 1940, about the funds' (hereafter referred to as the "Funds") compliance (see Attachment I) with the requirements of subsections (b) and (c) of Rule 17f-2 under the Investment Company Act of 1940 ("the Act") as of October 31, 2004. Management is responsible for the Funds' compliance with those requirements. Our responsibility is to express an opinion on management's assertion about the Funds' compliance based on our examination. Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Funds' compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. Included among our procedures were the following tests performed as of October 31, 2004, and with respect to agreement of security purchases and sales, for the periods indicated in Attachment I: o Inspection of the records of Franklin Templeton Investors Services, Inc. as they pertain to the security positions owned by the Funds and held in book entry form. o Reconciliation of such security positions to the books and records of the Funds. o Agreement of a sample of security purchases and sales since our last report to the books and records of the Funds. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Funds' compliance with specified requirements. In our opinion, management's assertion that the Funds were in compliance with the requirements of subsections (b) and (c) of Rule 17f-2 of the Investment Company Act of 1940 as of October 31, 2004 with respect to securities reflected in the investment accounts of the Funds is fairly stated, in all material respects. This report is intended solely for the information and use of the Board of Trustees and Board of Directors, management, 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/PricewaterhouseCoopers LLP San Francisco, California July 5, 2006 MANAGEMENT STATEMENT REGARDING COMPLIANCE WITH CERTAIN PROVISIONS OF THE INVESTMENT COMPANY ACT OF 1940 We, as members of management of the Franklin Templeton Funds indicated in Attachment I (the "Funds"), are responsible for complying with the requirements of subsections (b) and (c) of Rule 17f-2, "Custody of Investments by Registered Management Investment Companies," of the Investment Company Act of 1940. We are also responsible for establishing and maintaining effective internal controls over compliance with those requirements. We have performed an evaluation of the Funds' compliance with the requirements of subsection (b) of Rule 17f-2, as interpreted in Franklin Investors Securities Trust SEC No-Action Letter (publicly available September 24, 1992), and subsection (c) of Rule 17f-2 of the Investment Company Act of 1940, as of October 31, 2004, and for the periods indicated in Attachment I. Based on this evaluation, we assert that the Funds were in compliance with the requirements of subsection (b) of Rule 17f-2, as interpreted in Franklin Investors Securities Trust SEC No-Action Letter (publicly available September 24, 1992), and subsection (c) of Rule 17f-2 of the Investment Company Act of 1940, as of October 31, 2004, and for the periods indicated in Attachment I, with respect to securities reflected in the investment accounts of the Funds. By: /s/ Galen G. Vetter - --------------------------------- GALEN G. VETTER CHIEF FINANCIAL OFFICER 6/21/06 - --------------------------------- Date /s/ Jimmy D. Gambill - ----------------------------------- JIMMY D. GAMBILL SENIOR VICE PRESIDENT AND CHIEF EXECUTIVE OFFICER-FINANCE AND ADMINISTRATION 6/26/06 - ---------------------------------- Date ATTACHMENT I