UA-R-GC-1914-01-01-1978-03-02_Page-005

On the Fund audit, Mr. Crary noted that most discussion had revolved around Arthur Andersen's statement that the Fund was unable to obtain from the companies in which it has placed money, audited statements prepared according to generally accepted accounting procedures. The auditors have been asked by the Trustees to rephrase their language in this recommendation. Mr. Crary summarized the Arthur Andersen recommendations to the Trustees: that there be a formalizing of decision-making and administrative procedures; that there be a clear policy on termination of employees; that a "code of conduct" be adopted; that cash advances for certain equipment purchases and other purposes (principally by MES) be limited where possible; that consideration be given to creating an internal auditing control position; that RaFund have the same financial year as the other entities; that alloca­tion and charging of University support of the Fund be settled. On this latter point it was determined that this should be left up to the administrators of the University and the Fund to settle. In summary Mr. Crary said that Arthur Andersen's main point was that because of the increasing complexity of the various activities, more formal statements of responsibility, authority and operating procedures be developed and adopted. Mr. Hedlund requested a memorandum from President Pedersen and Mr. Dater on the recommendations made by Arthur Andersen and the actions proposed to meet them. 3. Report on the Dollar Endowment - Mr. Hedlund The endowment being managed by Brown Brothers Harriman has a current market value of $2.2 million and yields approximately $130,000 per year income. This represents a 6% overall return. .. ./