March 28, 1946



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

Dear President Donovan:

     I submit herewith the Financial Report of the University for
the period ended February 23, 1946.

                           g'eneral Fund

     The combined general income realized during the period amounted
to $3,093,370.93. This amount is 2.2.9i% greater than the income
realized during the corresponding period of the preceding fiscal
year and is 86.6% of the current year budget estimate of $3, 492, 307.96.
A further analysis of income is shown below:

                       Budget          Realized
   - Income           Estimnate         Income           Per Cent

   Fixed Items      $2,887,356.96   $2,706,051.45        93.7%
   Variable Items      604,951.00      387,319.48        64.0
      Totals        $3 ,492,307.96  $3,093 370.93        a____

      During the first eight months of the fiscal year 93.74 of the
fixed items consisting of State Appropriation Allotments, Federal
(Grants, Endowment and Miscellaneous Income, had been realized.
During the same period 64.0% of variable items consisting of Student
Fees, Sales and Services and Auxiliary Income had been realized.
The increased enrollment experienced during the Winter Quarter is
expected to be maintained or further increased during the Spring
Quarter. Thc variable income which increases in proportion with
student enrollment is expected to be fully realized by the end of
the fiscal year. The possibility is further enhanced by the; fact
that the Veterans' Administration has begun to pay its obligation
to the University in connection with Public Law 346.

     Charges during the period for expenditures and encumbrances
against departmental appropriations srmointcd to $2,145,095.51. The
charges exceeded that recorded durin;r the corresponding period of
the preceding fiscal year by l3.6f, and amountcd to 63.4% of the
current year departmental appropriations which have been authorized
in the amount of $3,382,678.25.

                         Re strictcd Funds

     The balance of Restricted Funds at the beginning of the fiscal
year was $1,094,805,29.  During the period there were additions to
the funds aggirregating $1,660,922.45. Expenditures were authorized