2



       Members of the Committee examined the financial report, expressed
interest in the information concerning insurance coverage, and upon motion
duly made, seconded and carried, the report was authorized received and
filed.



       C. Budget Changes.

       President Donovan submitted a list of changes in. the University budget
which had been requested, and recommended by him.  He read the list, which
showed a net decrease in budget appropriations of $1, 332. 84.

       Members of the Committee being advised, upon motion duly made,
seconded and carried, the budget changes were approved, and the necessary
budget adjustments were authorized made.



      D. Delayed Delivery of Bonds for Construction of New Men' s Resi-
dence Hall..

      President Donovan reported that the University had, about a year ago,
made a loan agreement with the Federal Government for the purchase of
$1, 400, 000 bonds for the construction of the new men' s residence hall, and
the bonds were sold, dated July 1, 1953. He further reported that the
Comptroller had not delivered all the bonds, and read the following letter:



                                        February 18, 1.954


      Dr. H. L. Donovan, President
      University of Kentucky

      My dear President Donovan:

             The University made a loan agreement with the Federal
      Government for the purchase of $1, 400, 000 bonds for the con-
      struction of the new Men' s Residence Dormitory.  These bonds
      were to run for a period of 40 years and bear an interest rate of
      3.01 per cent per annum.  The bonds were advertised and sold
      in 1953.  The usual procedure was to deliver $1, 400, 000 in
      bonds and receive government check.  The proceeds would be
      deposited with the State Treasurer.

             I saw no need to secure all of the money at one time and
      so stated. Great pressure was brought to bear to close the
      transaction at one time and receive all of the money, place it to
      the credit of the State Property and Buildings Commission against
      which they would let a contract for the construction of the dormi-
      tory-, and encumber the money available.  I made two trips to