67.083 





8.070 





75.153 





(20.778) 





m r 5 







J 77.270 



$ 513.916 





45.743 





559.659 





(248.106) 







311.553 





$388,823 



Plant fundi 



Lind and buildings 

 Equipment 



Less: accumulated depreciation 



Total, trust hinds 



Federal 



Capita/ funds 

 Property 

 Equipment 



Less: accumulated depreciation 

 Total, federal funds 

 Total, all funds 



Included in the accumulated depreciation of the federal capital funds is 

 $25 830,000 of" depreciation expense for 1992. 



Depreciation and amortization expense in the trust funds for fiscal year 

 1992 for income-producing assets amounted to $2,399,000 and is included in 

 auxiliary activities expenditures in the current funds Depreciation of non- 

 income-producing equipment and buildings for 1992 amounted to 

 $2,629,000 and is included in the plant fund. 



The balance of the plant fund at September 30, 1992 included $8,680,000 

 of unexpended funds for furure plant acquisitions. 



8 Commitments and Contingencies 



Leases for various Smithsonian warehouse and office spaces provide for escala- 

 tion of rents to coincide with increases in property taxes, operating expenses 

 attributable to the leased property and the Consumer Price Index 



The Institution's operating leases require furure minimum lease payments 

 as follows: 



Lease payments 



($000s) 



1993 



t 9.513 



1994 



7.598 



1995 



5.343 



1996 



1.724 



1997 



1.108 



Thereafter 



2.877 





$:« 163 



Rental expense for office facilities aggregated approximately $10,407,000 in 

 1992. 



The Institution receives funding or reimbursement from governmental 

 agencies for various activities, which are subject to audit. Audits of sponsored 

 program costs have been completed through the fiscal year ending September 

 30, 1989, however, final resolution from the cognizant agency for audits of fis- 

 cal yean 1983 through 1989 has not occurred. Any adjustments which may re- 

 sult from those audits and the audits for fiscal years 1990 through 1992 are not 

 expected to have a material effect on the Institution's financial statements. 



9. Long-term Debt 



Long-term debt as of September 30. 1992 consists of the following: 



9% note payable to The Riggs National Bank, interest only payable 

 quarterly commencing December 31.1 986 . interest and principal 

 payable quarterly commencing September 30. 1991 . until June 30. 

 1998. with the remaining unpaid principal balance duejune 30. 1998. 



Note payable to Signet Bank, bearing interest at 1 % in excess of the 

 Federal Funds Rate, which was 5 5% at September 30. 1992: interest 

 and principal payable in quarterly installments of $63,000 until 

 December 3 1 . 1996. with the remaining unpaid principal balance due 

 December 31. 1996. 



(JOOOst 



$ 9.503 



3.610 

 $13,113 



The aggregate amount due fot all borrowings for the veats ending Septem- 

 ber 30. are as follows: $1.57". 000 in 1993: $1,700,000 in 1994: $1,835,000 in 

 1995: $1,982,000 in 1996; $2. 143,000 in 1997 and $3,876,000 in years 

 thereafter. 



The proceeds of the note with The Riggs National Bank were used to fund 

 consrruction of a restaurant addition to the National Air and Space Museum. 

 The proceeds of the note with Signet Bank were used to finance a warehouse 

 facility for Institution museum shops. During the fiscal year ended September 

 30, 1992, approximately $1,085,000 was recorded as interest expense and was 

 paid by Auxiliary Activities funds. 



10 Federal Operating Funds 



The federal operating funds include appropriations for salaries and expenses 

 which are expended in the vear received Also included are amounts approx- 

 imating $25,475,000 received with the provision that such amounts can be ex- 

 pended over a period greater than one year. 



On November 5, 1990, the U.S. Congress enacted Public Law 101-510, the 

 Defense Authorization Act (Act), which prescribes the rules for determining 

 the availability of appropriation balances and establishes the procedures for 

 closing appropriation accounts 



The major purpose of the Act is to restrucrure annual appropriation ac- 

 counts Beginning with the fiscal year 1989 appropriation accounts, agencies 

 are now required to maintain annual appropriations for a five-vear period fol- 

 lowing the year of appropriation At the end of an appropriation's five-year 

 life, the appropriation account is closed and any unobligated balances are then 

 returned to the U.S. Treasury. The Act also provides for the phasing out of un- 

 expended previous year's appropriations as of September 30, 1993. 



Under the Act, unobligated balances of annual appropriation accounts will 

 remain on the Institution's records until the appropriation accounts are closed. 



The federal operating funds for the year ended September 30. 1992 in- 

 cluded the following: 



($000s) 





Revenues and 

 other additions 





Salanes and expenses 



Special Foreign Currency Program 



US. India Fund (transfers from 



Department of State) 

 Smithsonian Tropical Research 



Institute 



Appropriations 

 $281,183 



Other 

 » - 



1.319 



154 



$1,473 



September 30. 1992 

 $15,274 

 273 



361 



69 





$281,183 



$15,977 



On July 11. 1990. a settlement was awarded in the amount of $3,022,350 

 arising out of a suit against the United States by a contractor who was de- 

 faulted by the General Services Administration for failure to complete a proj- 

 ect for the Museum Support Center in a timely fashion. This mandatory 

 obligation falls outside the provisions of the Antideficiency Act. According to 

 accounting principles prescribed by the Comptroller General of the United 

 States, the Institution recognized this expense, in fiscal year 1990, when settle- 

 ment by the United States resulted in an operating fund deficit. The Institu- 

 tion received appropriations in fiscal year 1992 of approximately $994,000 as a 

 partial payment of the claim. The Institution will request appropriated funds 

 in fiscal years 1993 and 1994 to pay the balance of the claim. 



The Institution has recorded an unrealized loss of $54,000 to reflect ex- 

 change rate changes related to the U.S. India Fund. 



11. Collections 



In accordance with policies generally followed by museums, collections pur- 

 chased and donated are not included in the statement of financial condition. 

 The Institution records the acquisition of collections as an expense in the year 

 of purchase and records the deaccession of collections as restricted revenue in 

 the year of sale. For fiscal year 1992. $8,340,000 was expensed to trust funds 



232 



