Independent Auditors' Report 



BOARD OF REGENTS 

 SMITHSONIAN INSTITUTION: 



We have audited the accompanying statement of 

 financial position of the Smithsonian Institution 

 (Smithsonian) as of September 30, 1997, and the 

 related statements of financial activity and cash flows 

 for the year then ended. These financial statements 

 are the responsibility of the Smithsonian's manage- 

 ment. Our responsibility is to express an opinion on 

 these financial statements based on our audit. 



We conducted our audit in accordance with gener- 

 ally accepted auditing standards. Those standards 

 require that we plan and perform the audit to obtain 

 reasonable assurance about whether the financial 

 statements are free of material misstatement. An audit 

 includes examining, on a test basis, evidence support- 

 ing the amounts and disclosures in the financial state- 

 ments. An audit also includes assessing the account- 



ing principles used and significant estimates made by 

 management, as well as evaluating the overall finan- 

 cial statement presentation. We believe that our audit 

 provides a reasonable basis for our opinion. 



In our opinion, the financial statements referred to 

 above present fairly, in all material respects, the finan- 

 cial position of the Smithsonian Institution as of Sep- 

 tember 30, 1997, and its changes in net assets and its 

 cash flows for the year then ended, in conformity 

 with generally accepted accounting principles. 



Washington, D.C. 

 January 16, 1998 



KPMG Peat Marwick LLP 



SMITHSONIAN INSTITUTION 



Statement of Financial Position September 30, 1997 (in thousands) 



Trust 



Federal 



Total 



Funds 



Funds 



Funds 



$ 4,193 



192,855 



197,048 



56,385 



14,368 



70,753 



16,956 



— 



16,956 



4,300 



— 



4,300 



18,121 



838 



18,959 



609,660 



— 



609,660 



106,667 



409,829 



516,496 



.Assets: 



Cash and balances with the U.S. Treasury 



Receivables and advances (note 4) 



Prepaid and deferred expenses (note 5) 



Other assets (note 6) 



Inventory 



Investments (note 7) 



Property and equipment, net (note 10) 



Collections (note 6) 



Total assets 



816,282 



617,890 



1,434,172 



Liabilities: 



Accounts payable and accrued expenses 



Payable for investment securities purchased 



Deferred revenue 



Debt (note 11) 



Deposits held for others (note 12) 



Accrued annual leave 



Unexpended federal appropriations 



36,089 

 2,225 



53,602 

 1,000 

 3,933 

 4,815 



33,423 



14,4"-. 

 173,800 



69,512 

 2,225 



53,602 

 1,000 

 3,933 



19,290 

 173,800 



Total liabilities 



101,664 



221,698 



323,362 



Net assets: 

 Unrestricted: 



Funds functioning as endowments (note 8) 

 Operational balances and net property and equipment 



404,005 

 75,185 



396,192 



404,005 

 471,377 



Total unrestricted net assets 



479,190 



396,192 



875,382 



Temporarily restricted: 



Funds functioning as endowments (note 8) 

 Donor contributions for ongoing programs 



149,089 

 29,877 



— 



149,089 

 29,877 



Total temporarily restricted net assets 



178,966 



— 



178,966 



Permanently restricted: 

 True endowment 

 Interest in perpetual trusts 



54,560 

 1,902 



— 



54,560 

 1,902 



Total permanently restricted net assets (note 8) 



56,462 



- 



56,462 



Total net assets 



714,618 



396,192 



1,110,810 



Commitments and contingencies (note 13) 

 Total liabilities and net assets 



$ 816,282 



617,890 



1,434,172 



See accompanying notes to the financial statements. 



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