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their full annual supplementary compensations; but no member of the department
shall receive more than the amount previously approved as an annual supplement
to his basic salary.

Departmental Operational Fund Surplus

If at the end of any fiscal year, after compliance with provisions, "First,"
"Second," and "Third," there is a surplus in the Departmental Operational
Fund, it shall be transferred to the Departmental Reserve Fund.

VI. THE DEPARTMENTAL RESERVE FUND

The document approved by the Trustees provides that after compliance with
provisions "First" through "Third," monies remaining shall be used as pre-
scribed in provision "Fourth:" "To aid departmental development, research and
other purposes recommended by the Dean and approved by the University
Administration."

Departmental Reserve Fund Surplus

The document approved by tine Trustees continued: "Fifth, any remaining surplus
in the specific clinical department fund, after compliance with provisions
"First" through "Fourth," shall be transferred to the Medical School Trust Fund.

In accordance with the provisions unencumbered balances in each of the
Departmental Reserve Funds at the end of each fiscal year shall be transferred
to the Medical School Trust Fund.

VII. THE MEDICAL SCHOOL TRUST FUND

The document approved by the Trustees stipulates that:

"On the recommendations of the Dean of the Medical School and the
Administrator of Health Affairs, subject to the recommendations of the Chancel-
lor and the President, and with the final approval of the Board of Trustees,
monies in the Medical School Trust Fund may be used for any or all of the follow-
ing purposes: (1) salary supplementations, (2) research activities, and (3)
other medical school projects."

Any surplus in the Medical School Trust Fund shall be invested permanently,
or temporarily, under the provisions of the fiscal agency agreement between
the Trustees of the Consolidated University of North Carolina and the Wachovia
Bank and Trust Company.

VIII. MODIFICATION

There can be no change in the basic principles and policies as affirmed
by the Trustees in their adoption of the document presented to the Executive
Committee on September 8, 1952, without formal amendment to that document by
the Trustees. However, if experience indicates that the procedures and
practices established by this memorandum, for effectuating the document of the