Music Teachers National Association, Inc. Consolidated Statement of Financial Position June 30, 2006.(Financial report)

Indendent Auditor's Report

We have audited the accompanying consolidated statement of financial position of Music Teachers National Association, Inc. as of June 30, 2006, 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, 2006, 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 audit was 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           $1,125,035 
Investments at fair value            1,942,332 
Accounts receivable                     33,305 
Inventory                                6,619 
Prepaid expenses                        21,056 
Property and equipment, net             55,435 
Deposits                                   420 
  Total assets                      $3,184,202 
Liabilities and net assets: 
  Liabilities: 
Accounts payable                        $6,572 
Due to state and local affiliates       87,736 
Accrued expenses                        43,796 
Deferred revenue                       859,013 
Total liabilities                      997,117 
Net Assets: 
Unrestricted                         1,272,284 
Unrestricted-Board designated          600,878 
Temporarily restricted                 313,923 
Total net assets                     2,187,085 
Total liabilities and net assets    $3,184,202 

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.