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VOTED that the Board of Regents authorizes the Secretary to establish as part of the Smithsonian's endowment funds, true restricted funds as provided from the Museum of the American Indian, Heye Foundation, and to authorize the transfer of the restricted monies identified for this purpose.

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This report summarizes for the Regents the Institution's current fiscal year 1990 budget projections and the previously approved budget for fiscal year 1991. Also presented to the Regents for approval are modifications to the fiscal year 1991 Trust Fund budget and the Federal budget for fiscal year 1992.

[[underlined]] Fiscal Year 1990 (Schedules B and C) [[/underlined]]

Schedule B continues to reflect the Institution's Trust Fund and Federal budgets without change from the May report to the Regents. Schedule C remains unchanged with respect to the Federal projection; however, Trust Fund projections have been updated.

As a result of the third quarter review there is some room for cautious optimism in our projected fiscal year 1990 results. While the current projection continues to show a break even level, an amount of $1.1 million has been identified as a provisional, partial restoration of the $2.6 million cut to the internal awards programs made in May. If current figures hold, this amount could ultimately be used to partially restore the awards programs or alternatively to help balance the fiscal year 1991 budget. There is also $920,000 left in the Contingency accounts, some portion of which may still be available at year-end and might similarly be used.

The $1.1 million restoration is the result of increased net income. Principal increases are $550,000 for the Smithsonian Institution Press, $276,000 for the Air and Space Magazine (this improvement lowers the deficit to $100,000), $182,000 for Concessions and $140,000 for Mail Order.

As the Institution approaches the closeout of the fiscal year, it will continue to take all necessary steps to meet the Regents' requirement for a balanced budget. Balanced budgets for fiscal years 1991 and 1992 will also be critical given the current level of uncertainties we face. In order to facilitate such fiscal prudence action will be taken as apart of the year-end closing to establish appropriate reserves to the extent increased income levels permit.

The following motion is suggested:

VOTED that the Board of Regents approves the proposed revisions to the budget of the nonappropriated funds for fiscal year 1990 and authorizes expenditures by the Secretary in accordance therewith; any material changes in program plans incorporated in the revised budget, or any changes of more than $250,000 in any general unrestricted Trust fund program or administrative expenditure, shall be made only with approval of the Board of Regents or its Executive Committee.
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