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PEAT, MARWICK, MITCHELL & CO.
Certified Public Accountants
1140 Connecticut Avenue, NW.
Washington, D.C. 20036

The Board of Regents
Smithsonian Institution:

We have examined the balance sheet of private funds of Smithsonian Institution as of June 30, 1968 and the related statement of changes in fund balances for the year then ended.  Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

As stated in note 1, the Institution changed its method of accounting to the accrual basis for that protion of the unrestricted funds relating to activities during the year.  Physical inventories for such activities were not taken at June 30, 1967, and estimated figures have been used.  Because such amounts enter materially into the determination of operating results of activities, we do not express an opinion of the current year's statement of changes in fund balances for that portion of unrestricted funds relating to activities.

In our opinion, the accompanying balance sheet of private funds of Smithsonian Institution presents fairly the financial position of Smithsonian Institution at June 30, 1968 and the related statement of changes in fund balances, except for that portion of the unrestricted funds relating to activities, for which no opinion is expressed, present fairly the results of its operations for the year then ended on the modified cash basis as explained in note 1 in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year, except for the effect on the balance sheet of current funds of the conversion of that portion of unrestricted funds relating to activities to the accrual basis, which we approve.

PEAT, MARWICK, MITCHELL & CO.
August 23, 1968

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