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<PAGE> PAGE 2
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<PAGE> PAGE 4
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SIGNATURE KIMBERLEY MONASTERIO
TITLE ASST. TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FRANKLIN
FEDERAL MONEY FUND JUNE 30, 1996 ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000316403
<NAME> FRANKLIN FEDERAL MONEY FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 133,546,082
<INVESTMENTS-AT-VALUE> 133,546,082
<RECEIVABLES> 801,200
<ASSETS-OTHER> 7,109
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 134,354,391
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,695,715
<TOTAL-LIABILITIES> 6,695,715
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 127,658,676
<SHARES-COMMON-STOCK> 127,658,676
<SHARES-COMMON-PRIOR> 139,286,060
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 127,658,676
<DIVIDEND-INCOME> 6,814,650
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (867,763)
<NET-INVESTMENT-INCOME> 5,946,887
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 5,946,887
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,946,887)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 257,198,735
<NUMBER-OF-SHARES-REDEEMED> (274,749,843)
<SHARES-REINVESTED> 5,923,724
<NET-CHANGE-IN-ASSETS> (11,627,384)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 543,109
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 867,763
<AVERAGE-NET-ASSETS> 126,250,624
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.047
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> (0.047)
<PER-SHARE-DISTRIBUTIONS> 0.000
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<EXPENSE-RATIO> 0.840
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
of Franklin Federal Money Fund:
In planning and performing our audit of the
financial statements and financial highlights of
the Franklin Federal Money Fund for the year
ended June 30, 1996, we considered its internal
control structure, including procedures for
safeguarding securities, in order to determine
our auditing procedures for the purpose of
expressing our opinion on the financial
statements and financial highlights and to
comply with the requirements of Form N-SAR, not
to provide assurance on the internal control
structure.
The management of the Franklin Federal Money
Fund is responsible for establishing and
maintaining an internal control structure. In
fulfilling this responsibility, estimates and
judgments by management are required to assess
the expected benefits and related costs of
internal control structure policies and
procedures. Two of the objectives of an
internal control structure are to provide
management with reasonable, but not absolute,
assurance that assets are safeguarded against
loss from unauthorized use or disposition and
that transactions are executed in accordance
with management's authorization and recorded
properly to permit preparation of financial
statements in conformity with generally
accepted accounting principles.
Because of inherent limitations in any internal
control structure, errors or irregularities may
occur and not be detected. Also, projection of
any evaluation of the structure to future
periods is subject to the risk that it may
become inadequate because of changes in
conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control
structure would not necessarily disclose all
matters in the internal control structure that
might be material weaknesses under standards
established by the American Institute of
Certified Public Accountants. A material
weakness is a condition in which the design or
operation of the specific internal control
structure elements does not reduce to a
relatively low level the risk that errors or
irregularities in amounts that would be material
in relation to the financial statements and
financial highlights being audited may occur and
not be detected within a timely period by
employees in the normal course of performing
their assigned functions. However, we noted no
matters involving the internal control
structure, including procedures for safeguarding
securities, that we consider to be material
weaknesses, as defined above, as of June 30, 1996.
This report is intended solely for the
information and use of management and the Board
of Directors of the Franklin Federal Money Fund
and the Securities and Exchange Commission.
S\Coopers & Lybrand L.L.P.
San Francisco, California
August 6, 1996
