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Progress in implementing recommendations from Coopers & Lybrand and the Inspector General. The Committee asked for a report on the top priority recommendations from recently completed audits and asked Mr. Blair to be conscious of staffing levels before drawing conclusions about an organization unit's failure to implement earlier recommendations.

The Inspector General's draft semi-annual report to the Congress, which suggested that there are inherent difficulties in administering museum facilities at considerable distance from the Mall -- an important facet of the forthcoming discussions on the dispersal of Smithsonian activities.

The history of the Institution's efforts to design and implement a Smithsonian financial management information system. New management and Price Waterhouse are engaged to confirm the vision of the system at all levels, review the suitability of the previously chosen software, and develop an implementation plan. The Committee commented that the earlier disappointments in bringing such a system up, while all too common among large and complex institutions, might be seen as an example of what happens when designers and users of the system do not reach agreement about common objectives.

The Committee felt assured that inventory losses in the Museum Shops were being effectively contained, the Committee agreed to discuss recent indirect cost and audit issues for Federal grants and contracts upon completion of a study by Coopers & Lybrand, the Committee reviewed with interest several illustrations of levels of operational funding from Federal and non-appropriated sources, and the Committee learned of the prudent measures which have been taken to safeguard Smithsonian funds deposited in banks.

REPORT OF THE PERSONNEL COMMITTEE

The Personnel Committee of the Board of Regents found no evidence of apparent conflicts of interest in the financial statements of the senior management and reviewed a report of the Associate General Counsel entitled, "Submission and review of Forms SI-1085, 'Confidential Statement of Employment and Financial Interests,' for Calendar Year 1990." From that report the Committee has unanimously agreed that the financial reporting procedures for those key staff who must report have functioned in accordance with established guidelines. The Committee recommended that, attendant to calling for the employees' reports, management should conduct orientation sessions to develop a greater understanding of the importance of timely filing.

REPORT OF THE INVESTMENT POLICY COMMITTEE

The Investment Policy Committee met on November 5, 1991, to review the performance and strategies of the Institution's five investment managers. The Committee also discussed ways in which the Committee's investment guidelines could be clarified and looks forward to considering a revised draft at its next meeting.