Financial Report 



331 



for on-going major repair and restoration of the Smith- 

 sonian's museums and facilities. Unexpended construction 

 funds represent amounts appropriated but not yet 

 expended for construction of new facilities. 



(5) Accessions and Deaccessions 



For fiscal year 1999, S6,794 of trust funds and $1,742 of 

 federal funds were spent to acquire collection items. Pro- 

 ceeds from trust fund deaccessions were $1,000. There were 

 no deaccessions of collection items purchased with federal 

 funds in fiscal year 1999. At September 30, 1999, accumu- 

 lated proceeds and related earnings from deaccessions 

 amounted to $17,270 and are designated within unrestricted 

 net assets for collections acquisition in the trust funds. 



Non-cash deaccessions result from the exchange, dona- 

 tion, or destruction of collection items, and occur because 

 objects deteriorate, are beyond the scope of a museum's 

 mission, or are duplicative. During fiscal year 1999, the 

 Smithsonian's non-cash deaccessions included works of art, 

 animals, historical objects, and natural specimens. Con- 

 tributed items held for sale total $4,060 and are included in 

 prepaid and deferred expense and other assets in the state- 

 ment of financial position. 



(6) Investments 



At September 30, 1999, investments consisted of the 

 following: 



Short-term investments: 

 Cash equivalents 

 U.S. Government obligations 



Endowment and similar investments: 

 Pooled investments: 

 Cash equivalents 

 U.S. Government and quasi-government 



obligations 

 Corporate bonds and other obligations 

 Common and preferred stocks 



Total pooled investments 



Non pooled investments: 

 Deposits with U.S. Treasury 



Total endowment and 

 similar investments 



Gift annuity program investments: 

 Cash equivalents 



Corporate bonds and other obligations 

 Common and preferred stock 



20,619 

 32,304 



52,923 



5,270 



44,591 

 163,136 

 469,944 



682,941 



1,000 



683,941 



4 



491 



1,162 



1,657 



(7) True Endowment and Funds Functioning 

 as Endowments 



Substantially all of the investments of the endowment are 

 pooled on a market value basis, with individual funds sub- 

 scribing to or disposing of units on the basis of the per unit 

 market value at the beginning of the month in which the 

 transaction takes place. At September 30, 1999, the market 

 value of the pool equated to $721 per unit. The market 

 value of the pool's net assets at September 30, 1999, was 

 $657,310. This represents all pooled investments plus or 

 minus net receivables and payables related to unsettled 

 investment transactions. 



Each fund participating in the investment pool receives 

 an annual payout equal to the number of units owned 

 times the annual payout amount per unit. The payout for 

 fiscal year 1999 was $22.80 per unit, or 4.5 percent of the 

 average market value of the endowment over the prior 

 five years. 



Net asset balances of the endowment consisted of the 

 following at September 30, 1999: 



Unrestricted 

 Unrestricted-designated 



Total unrestricted 



Temporarily restricted 

 Permanently restricted 



Total endowment net assets 



257,651 

 201,870 



459,521 



140,360 

 63,248 



663,129 



During 1999, the Smithsonian agreed to transfer the 

 Seward Johnson Trust Fund for Oceanography (the John- 

 son Fund) to Harbor Branch Oceanographic Institution, 

 Inc. (Harbor Branch), a private operating foundation. 

 The Johnson Fund was originally received by the Smith- 

 sonian in 1969 as a permanently restricted gift of $3,400, 

 restricted to the development and operation of the 

 Johnson-Sea-Link Research submersible vehicle and 

 oceanographic research. 



At the date of transfer, in February 1999, the original gift 

 corpus and accumulated interest totaled $44,800. The con- 

 tribution is reported in the statement of financial activity 

 as a non-operating reduction of both temporarily restricted 

 and permanently restricted net assets, in the amounts of 

 $41,400 and $3,400, respectively. 



In exchange for being appointed trustee of the Johnson 

 Fund, Harbor Branch agreed to donate 30 percent of the 

 value of the Johnson Fund at the date of transfer to the 

 Smithsonian from Harbor Branch's own funds. The contri- 

 bution of $13,400 is reported in the statement of financial 

 activity as a program support contribution, increasing tem- 

 porarily restricted net assets. The net affect of these related 

 transactions is a $31,400 reduction in net assets. 



Total investments 



738,521 



