Smithsonian Institution Statement of Cash Flows for the year ended September 30, 1994 (continued) 

 (with comparative totals for the year ended September 30, 1993) (In thousands) 



Cash flows from investing activities: 



Proceeds from the sale of property and equipment 



Payments for purchase of property and equipment 



Purchases of investment securities 



Proceeds from sale of investment securities 



Net cash used for investing activities 



Cash flows from financing activities - repayments of long-term debt 



Net increase in fund balances with U.S. Treasury and cash 



Cash and balances with U.S. Treasury at the beginning of year 



Cash and balances with U.S. Treasury at the end of year 



Supplemental information: Cash paid for interest was $781,000 and $961,000 in 1994 and 1993, respectively. See accompanying notes to financial statements. 



Trust 

 funds 



Federal 

 funds 



Total 

 all funds 



Touls 

 1993 



185 



(10,703) 



(828,110) 



829,212 



(47,674) 



185 



(58,377) 



(828,110) 



829,212 



(59,371) 



(593,865) 



584,531 



(9,416) 



(47,674) 



(57,090) 



(68,705) 



(8,433) 







(8,433) 



(1,577) 



272 

 1,364 



5,824 

 165,420 



6,096 

 166,784 



1,288 

 165,496 



$ 1,636 



171,244 



172,880 



166,784 



SMITHSONIAN INSTITUTION 



Notes to Financial Statements, September 30, 1994 



(1) Summary of Significant Accounting Policies 



(a) Basis of Presentation 



These financial statements reflect the Smithsonian Institution's receipt and 

 expenditure of funds obtained from all sources. These funding sources in- 

 clude federal appropriations, private sources, government grants and con- 

 tracts, investment income, and certain business activities 



Funds received from direct federal appropriations are reported in the 

 columns titled Federal Funds in the financial statements All other funds 

 are reported in the columns titled Trust Funds in the financial statements. 

 Federal funds and trust funds are accounted lor on the accrual basis of 

 accounting. 



Prior to fiscal year 1994, federal funds were accounted for on the obliga- 

 tion basis of accounting. Under this method of accounting, obligations of the 

 federal funds, such as purchase orders and contracts, were recognized as 

 expenditures, and the related obligations had been reported on the Statement 

 of Financial Condition, even though the related goods and services had not 

 been received. 



The 1993 comparative balances, including fund balances, have been 

 restated to conform with current accrual basis reporting practices. 



These financial statements do not include the accounts of the National 

 Gallery of An, the John F. Kennedy Center for the Performing Arts, or the 

 Woodrow Wilson International Center for Scholars, which were established 

 by Congress within the Institution, but are administered under separate 

 boards of trustees. 



lb) Fund Accounting 



To ensure compliance with the limitations and restrictions placed on the use 

 of resources available to the Institution, accounts are maintained in accor- 

 dance with the principles of fund accounting. This procedure classifies re- 

 sources for control, accounting and reporting purposes into distinct funds 

 established according to their nature and purposes. Separate accounts are 

 maintained for each fund; however, in the accompanying financial state- 

 ments, funds that have similar characteristics have been combined for presen- 

 tation into fund groups. Accordingly, all financial transactions have been 

 reported by fund group. 



The assets, liabilities, and fund balances of the Institution are self- 

 balancing as follows: 



Federal operating funds represent appropriated funds available for support 

 of the Institution's operations and are generally available for obligation only 

 in the year received. Separate subfund groups are maintained for each appro- 

 priation as follows: Salaries and Expenses; Special Foreign Currency; and the 

 Barro Colorado Island Trust Fund, which supports the Smithsonian Tropical 

 Research Institute. 



Federal construction funds represent the portion of appropriated funds 

 available for building and facility construction, restoration, renovation and 

 repair and are available for obligation until expended. Separate subfund 

 groups are maintained for each appropriation: Construction and Improve- 

 ments, Repairs and Restoration of Buildings, and the National Zoological 

 Park. 



Federal capital funds represent the value of the Institution's assets acquired 

 with federal funds plus nonexpendable property transfers from U.S. Govern- 

 ment agencies. 



Trust current funds, which include unrestricted and restricted resources, 

 represent nonappropriated funds available for support of the Institution's 

 operations. 



Trust endowment and similar funds include funds that are subiect to re- 

 strictions of gift instruments requiring that the principal be invested in perpe- 

 tuity and that only income be expended. Also classified as endowment and 

 similar funds are gifts which allow the expenditure of principal only under 

 specified conditions. 



Quasi-endowment funds are funds established by the governing board for 

 the same purposes as endowment funds; however, any portion of such funds 

 may be expended with board approval. Restricted quasi-endowment funds 

 represent gifts for restricted purposes where there is no stipulation that the 

 principal be maintained in perpetuity or for a period of time, but the govern- 

 ing board has elected to invest the principal and expend only the income for 

 the purpose stipulated by the donor. 



Trust plant funds represent resources restricted or internally designated for 

 future plant acquisitions, and funds expended for plant. 



(c) Investments 



Investments are stated at cost or amortized cost. Investments are recorded at 

 cost on a trade date basis, if purchased, or estimated fair value at date of ac- 

 quisition if acquired by gift. 



All investment income, except that of endowment and similar funds, and 

 gains and losses arising from the sale of investments, are accounted for in the 

 fund in which the related assets are recorded. Income of endowment and sim- 

 ilar funds is accounted for using the total return method (note 4) in the fund 

 to which it is restricted or, if unrestricted, as revenue in unrestricted current 



336 



