FRANKLIN UNIVERSAL TRUST — Audit Report / Information 2008

Oct 14, 2008

40-17F2 1 fut17f2091508.htm

**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: 811- 05569

Date Examination completed: September 15, 2008 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 Templeton Limited Duration Income Trust
Templeton Global Investment Trust
Franklin Real Estate Securities Trust
Franklin Strategic Series
Franklin High Income Trust
Franklin Capital Growth Fund
Franklin Templeton Money Fund Trust
Institutional Fiduciary Trust
Franklin Global Trust
Franklin Gold and Precious Metals Fund
Franklin Universal Trust
Templeton Emerging Markets Fund
Templeton Emerging Markets Income Fund
Templeton Global Income Fund
Templeton Income Trust
Franklin Strategic Mortgage Portfolio
Franklin Investors Securities Trust
Franklin Templeton International Trust
Franklin Value Investors Trust
Franklin Templeton Fund Allocator Series
Franklin Templeton Variable Insurance Products Trust

and the Board of Directors of

Franklin Money Fund
Franklin Custodian Funds, Inc.
Templeton Dragon Fund, Inc.
Templeton Institutional Funds, Inc.
Templeton Russia and East European Fund, 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, that the funds (see Attachment I), (hereafter referred to as the “Funds”) complied with the requirements of subsections (b) and (c) of Rule 17f-2 under the Investment Company Act of 1940 (“the Act”) as of June 30, 2008. 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 June 30, 2008, and with respect to agreement of security purchases and sales, for the periods indicated in Attachment I:

· Confirmation of all securities held by Franklin Templeton Investors Services, Inc. as they pertain to the security positions owned by the Funds and held in book entry form.

· Reconciliation of such security positions to the books and records of the Funds and Franklin Templeton Investor Services, Inc.

· Agreement of 109 security purchases and 109 security sales or maturities, since our last report, from the books and records of the Funds to the records of the transfer agent, Franklin Templeton Investor Services, Inc.

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 June 30, 2008 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, management, the Board of Trustees and Board of Directors 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

September 15, 2008

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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 June 30, 2008, and for the period 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 June 30, 2008, and for the period 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 Executive Officer - Finance and Administration

9/11/08

Date

/s/ Laura F. Fergerson

Laura F. Fergerson

Chief Financial Officer and Chief Accounting Officer 9/11/08

Date

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Attachment I

Fund Period

Franklin Templeton Limited Duration Income Trust	March 1, 2008 - June 30, 2008
Templeton Global Investment Trust:
Templeton Income Fund	March 1, 2008 - June 30, 2008
Templeton Russia and East European Fund, Inc.	March 1, 2008 - June 30, 2008
Franklin Real Estate Securities Trust:
Franklin Real Estate Securities Fund	March 1, 2008 - June 30, 2008
Franklin Strategic Series:
Franklin Biotechnology Discovery Fund	March 1, 2008 - June 30, 2008
Franklin Flex Cap Growth Fund	March 1, 2008 - June 30, 2008
Franklin Focused Core Equity Fund	March 1, 2008 - June 30, 2008
Franklin Global Communications Fund	March 1, 2008 - June 30, 2008
Franklin Global Health Care Fund	March 1, 2008 - June 30, 2008
Franklin Growth Opportunities Fund	March 1, 2008 - June 30, 2008
Franklin Natural Resources Fund	March 1, 2008 - June 30, 2008
Franklin Small Cap Growth Fund *	March 1, 2008 - June 30, 2008
Franklin Small-Mid Cap Growth Fund	March 1, 2008 - June 30, 2008
Franklin Strategic Income Fund	March 1, 2008 - June 30, 2008
Franklin Technology Fund	March 1, 2008 - June 30, 2008
Franklin High Income Trust:
Franklin High Income Fund	March 1, 2008 - June 30, 2008
Franklin Capital Growth Fund	March 1, 2008 - June 30, 2008
Franklin Money Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Money Fund Trust:
Franklin Templeton Money Fund	March 1, 2008 - June 30, 2008
Institutional Fiduciary Trust:
Franklin Cash Reserves Fund	March 1, 2008 - June 30, 2008
Money Market Portfolio	March 1, 2008 - June 30, 2008
Franklin Global Trust:
Fiduciary Large Capitalization Growth and Income Fund	March 1, 2008 - June 30, 2008
Fiduciary Small Capitalization Equity Fund	March 1, 2008 - June 30, 2008
Franklin International Growth Fund	** June 3, 2008 - June 30, 2008
Franklin Templeton Core Fixed Income Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Core Plus Fixed Income Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Emerging Market Debt Opportunities Fund	March 1, 2008 - June 30, 2008
Franklin Templeton High Income Fund	March 1, 2008 - June 30, 2008
Franklin Gold and Precious Metals Fund	March 1, 2008 - June 30, 2008
Franklin Universal Trust	March 1, 2008 - June 30, 2008
Templeton Emerging Markets Fund	March 1, 2008 - June 30, 2008
Templeton Emerging Markets Income Fund	March 1, 2008 - June 30, 2008
Templeton Global Income Fund	March 1, 2008 - June 30, 2008
Templeton Income Trust:
Templeton International Bond Fund	March 1, 2008 - June 30, 2008
Franklin Custodian Funds, Inc.:
Franklin DynaTech Fund	March 1, 2008 - June 30, 2008
Franklin Growth Fund	March 1, 2008 - June 30, 2008
Franklin Income Fund	March 1, 2008 - June 30, 2008
Franklin U.S. Government Securities Fund	March 1, 2008 - June 30, 2008
Franklin Utilities Fund	March 1, 2008 - June 30, 2008
Franklin Strategic Mortgage Portfolio	March 1, 2008 - June 30, 2008
Franklin Investors Securities Trust:
Franklin Adjustable U.S. Government Securities Fund	March 1, 2008 - June 30, 2008
Franklin Balanced Fund	March 1, 2008 - June 30, 2008
Franklin Convertible Securities Fund	March 1, 2008 - June 30, 2008
Franklin Equity Income Fund	March 1, 2008 - June 30, 2008
Franklin Floating Rate Daily Access Fund	March 1, 2008 - June 30, 2008
Franklin Limited Maturity U.S. Government Securities Fund	March 1, 2008 - June 30, 2008
Franklin Low Duration Total Return Fund	March 1, 2008 - June 30, 2008
Franklin Total Return Fund	March 1, 2008 - June 30, 2008
Franklin Templeton International Trust:
Franklin India Growth Fund	March 1, 2008 - June 30, 2008
Franklin Value Investors Trust:
Franklin All Cap Value Fund	March 1, 2008 - June 30, 2008
Franklin Balance Sheet Investment Fund	March 1, 2008 - June 30, 2008
Franklin Large Cap Value Fund	March 1, 2008 - June 30, 2008
Franklin MicroCap Value Fund	March 1, 2008 - June 30, 2008
Franklin MidCap Value Fund	March 1, 2008 - June 30, 2008
Franklin Small Cap Value Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Fund Allocator Series:
Franklin Templeton 2015 Retirement Target Fund	March 1, 2008 - June 30, 2008
Franklin Templeton 2025 Retirement Target Fund	March 1, 2008 - June 30, 2008
Franklin Templeton 2035 Retirement Target Fund	March 1, 2008 - June 30, 2008
Franklin Templeton 2045 Retirement Target Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Conservative Target Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Corefolio Allocation Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Founding Funds Allocation Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Growth Target Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Moderate Target Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Perspectives Allocation Fund	March 1, 2008 - June 30, 2008
Franklin Templeton Variable Insurance Products Trust:
Franklin Flex Cap Growth Securities Fund	March 1, 2008 - June 30, 2008
Franklin Founding Funds Allocation Fund	March 1, 2008 - June 30, 2008
Franklin Large Cap Value Securities Fund	March 1, 2008 - June 30, 2008
Franklin Rising Dividends Securities Fund	March 1, 2008 - June 30, 2008
Franklin Small Cap Value Securities Fund	March 1, 2008 - June 30, 2008
Franklin Small-Mid Cap Growth Securities Fund	March 1, 2008 - June 30, 2008
Franklin Strategic Income Securities Fund	March 1, 2008 - June 30, 2008
Templeton Foreign Securities Fund	March 1, 2008 - June 30, 2008
Templeton Global Asset Allocation Fund	March 1, 2008 - June 30, 2008
Templeton Dragon Fund, Inc.	March 1, 2008 - June 30, 2008
Templeton Institutional Funds, Inc.:
Foreign Equity Series	March 1, 2008 - June 30, 2008

• Formerly Franklin Small Cap Growth Fund II. Name change as of March 31, 2008.

** Commencement of Operations