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taken include hiring freezes, curtailment of equipment for research and collections management, postponement or cancellation of a number of planned exhibitions, cancellation of a number of free public programs, cutbacks in travel in selected units, a reduction in the Institution's publication program for scholars and the general public, and the elimination of extended summer evening hours in 1986.

Looking ahead to fiscal year 1987, efforts are underway to identify and examine options for more major savings when potential GRH reductions to the Institution's operating and other amounts could amount to several times those experienced in fiscal year 1986.  Areas being studied will include program and support curtailments and eliminations, as well as staff reductions.

[[underlined]]--Nonappropriated Trust Funds:[[/underlined]]  A review of Trust Funds as of March 30, 1986 indicates a fund balance of $1,962,000, slightly above the $1,881,000 projected in January.  The Institution's ability to general auxiliary activity income principally from [[underlined]]Smithsonian[[/underlined]] magazine, museum shops, mail order, and the National Associates program, combined with savings in some expense categories, has enabled the Institution to protect the general unrestricted fund balance.  Coopers and Lybrand has recommended that the Institutions expense remaining liabilities related to the purchase of the Vever Collection ($3.5 million in general unrestricted expense) and the acquisition of the Thomas Eakins portrait of [[underlined]]William Rush and His Model[/[underlined]] ($250,000 in restricted expense) in order to adhere with generally accepted accounting principles.

FISCAL YEAR 1987 - ESTIMATES

[[underlined]]--Federal Appropriations:[[/underlined]]  Subsequent to the preparation of materials for the January Regents' meeting in response to a further appeal by the Secretary, the Office of Management and Budget allowed $3.5 million for construction of the Smithsonian Tropical Research Institute laboratory and conference center to match the Tupper Family gift.  House hearings on the Institution's fiscal year 1987 budget request, held on March 21, 1986, centered on the impact of the fiscal year 1986 Gramm-Rudman-Hollings cuts.  Senate hearings are scheduled for May 1986.  Final Congressional action is not expected until late summer.

[[underlined]]--Nonappropriated Trust Funds:[[/underlined]]  Expensing of the Vever Collection and the Eakins portrait in their entirety in fiscal year 1986 will change projections for fiscal year 1987 by $1.5 million in general unrestricted funds and $250,000 in restricted funds.  Income and expenses for fiscal year 1987 have also been adjusted to reflect the 1986 ticket price increase for the NASM Theater and Spacearium and reduced estimates of gift and grant income for the Folklife Festival, Cooper-Hewitt exhibitions and the National Science Resources Center.

OTHER MATTERS

Still pending is resolution of several income items related to the Quadrangle, including the appraisal and sale of the current facilities of the Museum of African Art and the complete payment of a small number