Viewing page 3 of 151

This transcription has been completed. Contact us with corrections.

-2-

that the Smithsonian has complied with applicable Federal laws.  In comparing the fiscal year 1988 figures with those of the prior year, Mr. Strom pointed out that the increase in Smithsonian activities has been substantial.

Mr. Bloom outlined for the Committee Coopers & Lybrand's major findings and recommendations in their Report to Management.  Weaknesses were discovered in the timely reconciliation of accounts between central accounting and the banks serving the Cooper-Hewitt Museum and the Tropical Research Institute; in timely reconciliation of Smithsonian Press's and its fulfillment contractors' inventory records; and in inventory procedures used by the museum shops, mail order, SITES, Smithsonian Press, Cooper-Hewitt, and Freer/Sackler shops.  Mr. Bloom also noted that the Institution continues to need a fully integrated purchasing and accounts payable computer system as well as an accurate property management system that will serve both property management and financial reporting needs.  Finally, Coopers & Lybrand could not readily locate documentation which clarifies the provisions of and indicates the authority for special pension agreements drawn on behalf of several former Smithsonian officials.

In discussion which ensued Miss Leven described for the Committee measures which have already been taken with respect to these recommendations, including consultations with software vendors, reinforcement of operating procedures and directives, and the hiring of specialists as appropriate for the museum shops and accounting offices.  The Committee specifically called for reports at their next meeting on (1) measures taken to improve banking relationships for the Cooper-Hewitt Museum, (2) enhancements to auxiliary activity inventory procedures, particularly those in the museum shops, and (3) confidentially presented documents including financial implications of the referenced special retirement agreements.  As to (2) above, especially,