The Icelandic Institute of Natural History: Operational and Financial Problems

This report identifies three main reasons for the difficulties experienced by the Icelandic Institute of Natural History in the past three years. First, Government budget appropriations to the Institute have not kept up with price trends. Second, the Institute’s own revenue has halved since peaking in 2001. Third, salaries and rent have increased substantially. As a result, the Institute’s yearly budget is insufficient to meet the costs of its current operations, and it has consequently accumulated a sizeable deficit.
In efforts to cut costs, the Institute has trimmed down its activities significantly, a development that clearly cannot continue without damaging its operations. The Institute’s management and representatives of the Ministry for the Environment agree that, if the Institute’s operations continue unchanged, it will become unable to perform its statutory duties adequately. In addition, parts of the Institute’s facilities obviously do not meet modern requirements for work facilities, storage needs and exhibitions.

The Icelandic National Audit Office points out that the Government needs to take a position on the scope of the Institute’s activities when deciding its budget. The benefits from the Institute’s projects need to be assessed, and decisions must be made regarding their priority and scope. Many projects are currently performed ineffectually, so either their number needs to be reduced systematically or the Institute’s budget must be increased.

Although the Institute’s financial problems are clearly attributable in part to external reasons, the Office points out that, nonetheless, the Institute has an obligation to keep within budget. In this context, the Institute’s management should, among other things, examine all streamlining possibilities as well as the option of using bought-in professional services during peak work periods. In addition, the Office points out that the Institute’s organisational structure is unnecessarily complex for its size, and the responsibilities of individual management employees need clarification.