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they exclude firms previously contracted for annual auditing or specialized consulting. It was noted that Coopers and Lybrand, the Institution's current independent auditor, rotates its engagement personnel on a regular basis and that they have recently changed their partner-in-charge as well. Mr. Stanton added that in effect the internal audit staff which interfaces with the independent auditors undergoes periodic changes also, not so much as a matter of policy but as a result of new staff moving into positions which are vacated by promotions and attrition. It was also noted that a new independent audit firm, as the Institution has experienced, cannot be expected to be fully effective and efficient until its third year, and during those first two years it would require a greater amount of Smithsonian staff assistance and orientation.

The Committee concluded that it would be prudent to schedule further discussion of these matters approximately 1 1/4 years prior to the end of Coopers and Lybrand's tenth year at the Smithsonian, with a goal of making a recommendation to the Regents at a subsequent meeting of the Board.

After the Committee agreed to meet again subject to the development of an agenda and schedule by staff, the formal meeting of the Audit and Review Committee was adjourned at approximately 9:30 a.m. and was followed by an enlightening tour and analysis of selected exhibitions in the National Museum of American History led by Mr. Kennedy.

[[underlined]] REPORT OF THE PERSONNEL COMMITTEE [[/underlined]]

Mr. Humelsine introduced the following report on the Personnel Committee's review of the staff's financial interests statements: