40-17F2 1 fmit17f2110502.txt 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: 811-05873 November 5, 2002 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 MULTI INCOME TRUST 4. Address of principal executive office: (number, street, city, state, zip code) One Franklin Parkway San Mateo, CA 94403 REPORT OF INDEPENDENT AUDITORS To the Board of Trustees of: The Franklin Templeton Funds: 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 in 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 September 30, 2002. 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 made in accordance with attestation standards established by the American Institute of Certified Public Accountants 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 September 30, 2002, and with respect to agreement of security purchases and sales, for the periods indicated: 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 of 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 September 30, 2002 with respect to securities reflected in the investment accounts of the Funds are fairly stated, in all material respects. This report is intended solely for the information and use of management and the 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 ------------------------------ PricewaterhouseCoopers LLP San Francisco, California November 5, 2002 MANAGEMENT STATEMENT REGARDING COMPLIANCE WITH CERTAIN PROVISIONS OF THE INVESTMENT COMPANY ACT OF 1940 We, as members of management of 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 subsections (b) and (c) of Rule 17f-2 as of September 30, 2002 and for the periods indicated. Based on this evaluation, we assert that the Funds were in compliance with the requirements of subsection (b) and (c) of Rule 17f-2 of the Investment Company Act of 1940 as of September 30, 2002 and for the periods indicated with respect to securities reflected in the investment accounts of the Funds. By: /S/ KIMBERLY H. MONASTERIO ----------------------------------- KIMBERLEY H. MONASTERIO PRINCIPAL ACCOUNTING OFFICER ATTACHMENT I FUND PERIOD COVERED ------------------------------------------------------------------------------ FRANKLIN STRATEGIC SERIES Franklin Aggressive Growth Fund August 1, 2002 - September 30, 2002 Franklin Large Cap Fund August 1, 2002 - September 30, 2002 Franklin U.S. Long-Short Fund August 1, 2002 - September 30, 2002 Franklin Natural Resources Fund August 1, 2002 - September 30, 2002 Franklin Biotechnology Discovery Fund August 1, 2002 - September 30, 2002 Franklin Blue Chip Fund August 1, 2002 - September 30, 2002 Franklin Global Health Care Fund August 1, 2002 - September 30, 2002 Franklin Global Communications Fund August 1, 2002 - September 30, 2002 Franklin Strategic Income Fund August 1, 2002 - September 30, 2002 Franklin California Growth Fund August 1, 2002 - September 30, 2002 Franklin Technology Fund August 1, 2002 - September 30, 2002 Franklin Small Cap Growth II Fund August 1, 2002 - September 30, 2002 Franklin Small Mid-Cap Growth Fund August 1, 2002 - September 30, 2002 FRANKLIN VALUE INVESTORS TRUST Franklin Balance Sheet Investment Fund September 1, 2002 -September 30, 2002 FRANKLIN INVESTORS SECURITIES FUND Franklin Short Intermediate U.S. Government Sec. Fund September 1,2002 - September 30, 2002 Franklin Convertible Securities Fund September 1, 2002 -September 30, 2002 Franklin Equity Income Fund September 1, 2002- September 30, 2002 Franklin Real Estate Securities Fund August 1, 2002 - September 30, 2002 Franklin Multi-Income Trust June 1, 2002 - September 30, 2002 Franklin Universal Trust September 1, 2002- September 30, 2002 Franklin Strategic Mortgage Portfolio September 1, 2002- September 30, 2002