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STATUS REPORTS

The Regents were provided status reports on the following topics:

Litigation
Mitchell and Other Advancement/Indemnification Cases
Development Initiative and Funds Raised
Senior-Level Recruitments
Major Construction Activities
Planning for the Extension of the National Air and Space Museum
Natural History Museum's West Court Project
Smithsonian Financial System
Biodiversity and Environmental Initiatives
Electronic Access and Communications
March 1995 "What About Increase?" Symposium

REPORT OF THE AUDIT AND REVIEW COMMITTEE

Mrs. Clark discussed the work of the Committee, noting that the Committee has held more than 50 meetings in the 15 years since its establishment, covering an extraordinarily wide range of topics, everything from the Archives of American Art to the Zoo. Citing Bylaw provisions for three Regent members of the Committee, Mrs. Clark encouraged her fellow Board members to consider serving in this capacity.

Providing an example of the kind of topic the Committee frequently considers in depth, Under Secretary Newman presented an update on "Issues of Revenue Enhancement." She gauged the dimensions of Smithsonian auxiliary activities in financial terms, noting fiscal year 1994 gross revenues of approximately $200 million and net revenues of approximately $20 million. These revenues assist in the funding of fellowships, acquisition of museum collections, educational outreach, scholarly studies, and special exhibitions. With all of the future financial scenarios suggesting that the Smithsonian will become even more dependent on its auxiliary activities, the Institution must be more cost-effective, more innovative, and even more aggressive in its revenue-producing activities. Accordingly, a series of analyses are being prepared on opportunities for revenue enhancement and the Smithsonian has contracted with Peat Marwick for a review of the organization, staffing, and the market environment of the Smithsonian Press in an age of electronic information. Mrs. Newman described the major categories of businesses within the Smithsonian, examined the reasons for fluctuations in revenue experienced by these activities, and outlined the steps being taken by each to increase revenue. A discussion which followed included the marketing of Smithsonian magazine, the issue of unrelated business income taxes, and reference to the Smithsonian National Board assistance in management's review of Smithsonian publishing.

The Committee reported that on November 29, 1994, they received a similar report from Mrs. Newman, a status report from Peat Warwick's review of the Smithsonian's fiscal year 1994 financial transactions, and Inspector General Blair's draft Five-Year Plan for fiscal years 1995-1999.