UA-R-GC-1914-01-01-1974-01-14_Page-011

DEPARTMENT OF STATE AGENCY FOR INTERNATIONAL DEVELOPMENT WASHINGTON. C .C . 20523 Mr. Charles 0' Connor The American University of Cairo 866 United Nations Plaza New York, New York 10017 Dear Mr. O'Connor: March 13, 1974 Subject: Grant AID/ csd 2476 I am writing in response to your recent communications requesting an additional allocation for this academic year of 125, 000 Egyptian Pounds under SRL No. 7 of Grant AID/ csd 2476, principally for salary adjust­ments to meet cost inflation in Egypt. As you know, allocations for operating expenses under AID/ csd 2476 have increased by over twenty percent during the past few years. This year the University is already dependent on a subsidy of LE I, 550, 000 to meet approximately eighty-one percent of the University's Egyptian Pound operating expenses, excluding sponsored research. To date, over seven million of your twenty-five million pound endowment grant has been spent or allocated for operating costs through this academic year. On the basis of draw downs to date and those projected over the next several years to meei: op e rd."Cing costs and for your endowment investment program, it is apparent that AUC will face a financial crisis in three or four years if the United States Government does not provide, for whatever reasons, additional major assistance to the University. Given the uncertainties of Congressional action with regard to replenishing and adding funds to your endowment, I believe it is in the interest of both the United States Government and A UC to husband ya.:r endowment funds by minimizing your operating deficits as much as possible. In view of the above, I have concluded that the best way to review your request is for Mr. Codi, of this Office, and Dr. Dean Bowman, a consultant to this program and Dean of the School of Business Administration at California State University, Long Beach, to review with University officials in Cairo your request for additional funds, and also the status of your endow­ment investment program. Accordingly, I would appreciate your notifying Dr. Byrd of the arrival in Cairo of Mr. Codi and Dr. Bowman on or about April 12. We will give you the exact date of their arrival , once their 'trave l ',