Viewing page 6 of 119

This transcription has been completed. Contact us with corrections.

-ii-

additional strength to the Regents in the face of growing needs for increased fund-raising expertise and minority representation on the Board. In addition, the Committee sought people who are young enough to sustain energetic service to and leadership of the Board over two full terms, or twelve years.

The Committee voted unanimously at its meeting on September 17, 1989, to recommend to the Regents the nomination of Dr. Homer A. Neal, a 47-year-old physicist of Michigan, and the Honorable R. James Woolsey, Jr., a 48-year-old lawyer and public servant of Maryland. The following motion was approved by the Board:

VOTED that the Board of Regents nominates Robert James Woolsey, Jr., and Homer Alfred Neal as citizen members of the Board and requests the Congressional members of the Board to introduce and support Joint Resolutions of the Congress effecting their appointment to the Board of Regents for the statutory term of six years.

[[underlined]] REPORT OF THE AUDIT AND REVIEW COMMITTEE [[/underlined]]

Meeting on June 1, the Audit and Review Committee discussed Coopers & Lybrand's audit plan for fiscal year 1989 and took issue with a proposed Financial Accounting Standards Board requirement to capitalize museums' collections. The Committee also reviewed actions taken in response to Coopers & Lybrand's recommendations to management (for fiscal year 1988), indicating extensive corrective activities with respect to the Smithsonian's banking relationships in New York City and in Museum Shop management, with further progress to be reported at the Committee's next meeting. The Committee received documentation on several special retirement agreements, one of which had been overpaid (less than $10,000). In the Committee's review of the most significant long-standing "open recommendations" of the Office of the Inspector General, management presented a record of closing out items related to Portrait Gallery accession records, rare book inventory in Paleobiology, the Museum of American History's inventory plan, and management improvements in Personnel. The Committee was also introduced briefly to the work of the Smithsonian Environmental Research Center, where the Committee joined in the dedication of the Mathias Laboratory later that morning.

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

It was noted that the total value of the endowment funds is currently $266,600,000, a new high. As of June 30, 1989, the market value of the endowment funds was $252,889,000 compared to $237,864,000 on March 31, 1988, and $220,909,000 on June 30, 1988. The net increase in market value over the last complete quarter (March 31 - June 30) reflects: (1) market appreciation of $12,056,000, (2) excess income reinvested to principal of $953,000 over the quarter's total return payout requirement, and (3) an addition of $2,015,000 in new money.

Of the Smithsonian endowment under active management, 63% was held in common stock, 25% in fixed income, 2.2% in convertible bonds, 0.3% in preferred stock, 3% in a mutual (common stock) fund, and 6% in cash and cash