Music Teachers National Association, Inc.: consolidated statement of financial position: June 30, 2002: independent auditor's report. (MTNA).

We have audited the accompanying consolidated statement of financial position of Music Teachers National Association, Inc. as of June 30, 2002, and the related consolidated statements of activities and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Association's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Music Teachers National Association, Inc. as of June 30, 2002, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were performed for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The accompanying schedules are presented for purposes of additional analysis and are not a required part of the basic consolidated financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole.

 
Assets: 
   Cash and cash equivalents                  $423,166 
   Investments at fair value                   542,647 
   Accounts receivable                          22,837 
   Inventory                                    10,371 
   Prepaid expenses                              5,624 
   Property and equipment, net                 148,816 
   Deposits                                     20,420 
     Total assets                           $1,173,881 
 
Liabilities and net assets: 
   Liabilities: 
        Accounts payable                        52,127 
        Due to state and local affiliates       51,978 
        Accrued expenses                        30,670 
        Deferred revenue                       766.055 
        Total liabilities                      850,830 
 
   Unrestricted net assets                     323,051 
 
     Total liabilities and net assets       $1,173,881 

Note 1--Summary of Significant Accounting

Policies: The following accounting principles and practices of Music Teachers National Association, Inc. (the "Association"), are set forth to facilitate the understanding of data presented in the consolidated financial statements.