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The meeting on May 24 concluded with a tour of the new Veterinary Hospital at the National Zoological Park.

Meeting again on September 14, 1988, the Audit and Review Committee discussed the conceptual study of an extension of the National Air and Space Museum which could serve to fulfill the Museum's mission into the twenty-first century. After it was pointed out that, as proposed to the Board of Regents, the next phase of study must include site selection, it was agreed that the Regents might continue to view Dulles airport as a preferred location while they prudently entertain offers of support from both Virginia and Maryland interests, at least until a formal commitment is made (recognizing that it is always possible that either state might offer advantageous terms that could be very difficult not to accept). In any event, the Committee suggested that the next phase of study should include a report on the project's financial feasibility, in terms of both its construction and operations into the future.

After introducing his colleagues from Coopers and Lybrand, Mr. Strom brought the Committee up to date on the progress of their audit of fiscal year 1988 financial transactions. Concluding its discussion of auditing matters, the Committee expressed its interest in reviewing the effectiveness of the Smithsonian Astrophysical Observatory's financial procedures and their relationship to Harvard University at the next meeting.

In executive session, Mr. Anderson and Mr. Perkins led the Committee through both a brief review of the origins of the current competitive bidding process for the Institution's independent auditor. They further explained the procedures to be followed by the staff, the Audit and Review Committee, and the Board of Regents in the forthcoming evaluation and selection process, whereupon the Committee suggested certain refinements to the Request for Proposal and evaluation procedures.

The Committee also received for its information and comment a written report entitled, "1987-1988 Internal Controls Review," which reported the findings of the Institution's triennial review of management functions.

[[underline]] REPORT OF THE INVESTMENT POLICY COMMITTEE [[/underline]]

As the Chairman of the Investment Policy Committee suggested, and the Regents approved, Mr. Mineta was appointed as a member of the Committee. The Institution moved forward to implement the mandate of the Committee as approved by the Board with respect to asset allocation. As of July 31, 24% of the endowment was in fixed income, 13% in cash, and 63% in equities, and the market value of the fund stood at approximately $218,000,000.

[[underline]] THE SECRETARY'S REPORT [[/underline]]

Mr. Adams began his oral comments by noting that the Smithsonian had been engaged in negotiations to arrange for the relocation of people occupying houses at the Environmental Research Center in Edgewater, Maryland, to public-assistance housing provided by the Anne Arundel County government. While he regretted the need to take these actions,
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