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-48- [[underline]] Policy Relating to Use of Trust and Federal Funds [[/underline]] Mr. Ripley explained that at the meeting of the Executive Committee he had reported that the Senate Subcommittee on Appropriations had requested a statement concerning the Smithsonian Institution policies governing the use of Federally appropriated funds, federally and privately financed contracts and grants, and Trust funds. This subject was one of four major issues raised in the GAO Report, and the Executive Committee requested the Regents to consider this draft in advance for further discussion. Mr. Webb stated that the Executive Committee had considerable discussion at its meeting to see how this request could be met. He said we are aware that there are certain Congressional members and others who question many parts of the procedure we are following so that this first preliminary draft should be reviewed carefully so as to explain how we handle these funds. Judge Higginbotham cautioned that reference to the policy related to building up an endowment fund must carefully explain the need for such funds. Senator Jackson commented about the importance of this document being reviewed by Mr. Hughes and the Audit and Review Committee, with a further draft to be submitted to the Board of Regents. The Chancellor stated that this document would ultimately be the policy stipulated by the Board of Regents, to be submitted to the Senate Subcommittee on Appropriations. Mr. Ripley welcomed the efforts of the Regents in undertaking this policy review. The preliminary draft of the policy statement follows.