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[[underlined]] Fiscal Year 1989 - Actual (Schedule B) [[/underlined]]

Operating funds received by the Institution in fiscal year 1989 from all sources (net of expenses related to auxiliary activities) totalled $303,044,000. This is $17,420,000 higher than the projection reported in September. Fiscal year 1989 Federal funds were in line with budget. The Institution returned to the Treasury an unobligated balance of $89,000, less than one-tenth of one per cent of final 1989 appropriations totalling $211,240,000 for salaries and other expenses.

The General Unrestricted Trust Fund balance increased by a startling $4.3 million to $13,301,000, $3.4 million more than last projected. The major factor for the increase was under-expenditures totalling $2.0 million in a wide variety of programs. Adding to the increase was realization of the $700,000 pledge due from the Estate of Arthur Sackler for acquisition of the Vever Collection. The fund balance also benefitted from $650,000 in increased net income from auxiliary activities. The largest single component was $771,000 recorded by the Smithsonian Institution Press; half of this sum resulted from cumulative adjustments related to account reconciliations. The increase from the Smithsonian Press and other small gains were offset by revenue shortfalls for Museum Shops, Mail Order and [[underlined]] Smithsonian [[/underlined]] Magazine. The goal of establishing a fund balance of 5% of gross trust fund expenditures has been reached and exceeded by $1.3 million.

Special Purpose income exceed budget by $2.5 million on the strength of investments, gifts, and miscellaneous income. Expenditures and transfers correspondingly kept pace resulting in little change to the Special Purpose fund balance. Government grants and contracts were $2.5 million lower than projections but, significantly, almost 22% ahead of the prior year.

Income in Restricted funds came in $13.8 million over the original budget (this number was not revised during the year). Of that amount $3.0 million came from increased investment income, $3.4 million primarily from the sale of deaccessioned collection items at the Hirshhorn Museum and Sculpture Garden, and $7.4 million in gifts and grants; some $6.6 million in Restricted funds was transferred to the Endowment.

Coopers & Lybrand completed the audit of the Institution's fiscal year 1989 financial activity on December 22. The Institution received an unqualified opinion. Coopers & Lybrand will make a formal presentation of their audit report to the Regents' Audit and Review Committee at its next meeting. The Coopers & Lybrand report will be included in [[underlined]] Smithsonian Year 1989 [[/underlined]] along with the Treasurer's Report.

[[underlined]] New Endowment Funds [[/underlined]]

The Institution has received an unrestricted bequest from the estate of Dorothy B. Koteen. A partial distribution from the estate totalling $177,484 has been received. Consistent with current policy, this amount will be placed in the endowment. As the significance of the bequest merits a named endowment, the following motion was passed: