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       President Wethington thanked Professor Havice for her presentation.
He reiterated that the Honors Program students do go on and achieve success
and recognized Trustee Chellgren as having been a student in the Honors
Program.

       President Wethington reviewed the following items in PR 1:

       1.   A buyer's guide to colleges lists the University of Kentucky
             among the top 250 colleges in the country.

       2.    Grants and contracts are up 17 percent for the six months
             ending December 31, 1992.

       3.    The Community College System has initiated a Strategic
             Planning Project designed to position the colleges for a major
             resource development effort.

       4.    The University of Kentucky Hospital has performed its 1,000th
             kidney transplant.

       He asked the members of the Board to review the other items in the
report at their leisure.

       President Wethington continued his report to the Board by giving a
slide presentation on the review of the structure and staffing in the
University of Kentucky. He said that the University Strategic Plan
indicates that the University's organization, values and management
processes should support the realization of University goals in an
efficient and effective manner and that the University structure, policies
and procedures should be assessed periodically to ensure their
responsiveness to changing goals and directions. Also, the recent
University Self-Study and the Reaffirmation Cormnittee Report urged that the
University undertake a careful and thorough study of the administrative
structure with this review focused on the clearer definition of central and
sector functions, more effective management responsibility for
institutional effectiveness functions, and possible achievement of some
economies and efficiencies.

       He said that recent budget reductions have necessitated a critical
look at structure and staffing at the University. He reminded the Board
that state government budgets were reduced by $85 million in October 1991,
with the recurring reduction for the system of higher education established
at $31.7 million. The program reduction to the University of Kentucky's
University System was established at $11.9 million and at $3.3 million for
the Community College System. In addition to that $15.2 million program
reduction, the 1992-93 state appropriation for the University System
included an additional reduction of $11.5 million, for a total program
reduction of $26.7 million, nearly 10% of the state appropriation in the
University System and 5% in the Community College System.

       President Wethington said that in dealing with those budget
reductions, the fundamental objective was to implement them in the least
damaging manner to the University with the highest priority placed on
protecting academic programs (instruction, research and service), and