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Smithsonian's initiatives in global change and biodiversity studies in the fiscal year 1991 budget allowance.

[[underlined]] FINANCIAL REPORT [[/underlined]]

Miss Leven introduced the Financial Report which appears below, noting that the Institution received an unqualified opinion from its independent auditors for its fiscal year 1989 financial statements. She emphasized that fiscal year 1989 trust funds finished the year with a considerable surplus due to additional income and unexpended funds, allowing the Institution to build its unrestricted trust fund balance to approximately $13.3 million. She added that projections for 1990 are not nearly so rosy, since the original budget was drafted more than a year and a half ago; results toward the end of the last fiscal year and the beginning of the current year suggest considerably lower income projections, by as much as $3 to $4 million below budget. Mr. Anderson outlined procedures which are being implemented to gain a more realistic projection of income as well as a better understanding of possibilities for cutting back trust fund expenditures by increments of 3% or 7%, noting that the staff will bring to the next meeting of the Board a plan for finishing out the year with a balanced budget.

Mr. Jameson reported on similar measures being implemented for the fiscal year 1990 appropriated funds, out of which the Institution has been forced to absorb the effects of Gramm-Rudman-Hollings, water and sewer payments to the District government, and the cost of pay increases. For example, he noted, it will not be possible to support summer evening visiting hours this year, which would cost approximately $500,000; efforts are under way to find corporate support. For fiscal year 1991 the Office of Management and Budget provided an increase of approximately $40 million, or 15%, for a