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[[table, 2 columns]]
[[underlined]] Expenses and Transfers [[/underlined]] | [[underlined]] Projection Compared to Budget [[/underlined]]

•Administrative and Program expenses - The majority of increased expenses continues to be associated, as noted in May, with Quadrangle fund raising, the impact of the executive-level pay increase, and exhibitions funding for Evans Hall. As a result of unsuccessful fund raising efforts, allotments have also been made for a Marine Sanctuary Program and the Catalog of American Portraits. These and other small increases are offset by additional overhead recovery of $600,000 resulting from higher levels of federal grant and contracts and restricted expenditures. | -$656,000

•Transfers - As proposed in the May report, favorable results in the Auxiliary Activities have allowed additional transfers to Scholarly Studies and the Fellowship Program. In addition, $245,000 of future year allocations was advanced under the Collections Acquisitions Program to allow for several important purchases by the Museums participating in this program. Due to lower estimates of NASM Theatre and Spacearium revenues, the transfer to general unrestricted funds has been reduced. | [[underlined]]-890,000[[/underlined]]

Net change in expense | -$1,546,000

Subtotal net change to Unrestricted General Trust Funds | [[double underlined]]+$1,647,000[[/double underlined]] [[/table]]

[[underlined]] Proposed use of funds. [[/underlined]] When added to the original budget deficit of $111,000, the projected change of $1,647,000 would result in a budgeted surplus of $1,536,000. It is recommended that a) the transfers for Quadrangle construction be increased by $500,000 (reducing the future year commitment by that amount) to a total of $2.0 million for this year; b) $500,000 be added to general unrestricted endowment increasing this year's transfer to $2.5 million; and c) $500,000 be transferred together with approximately $225,000 of proceeds from the sale of Belmont, to endow in perpetuity the